ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 30-0641353 (I.R.S. Employer Identification No.) |
933 MacArthur Boulevard, Mahwah, New Jersey (Address of principal executive offices) | 07430 (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered |
Common Stock, $0.01 par value | The Nasdaq Global Select Market |
Large accelerated filer ¨ | Accelerated filer ý |
Non-accelerated filer ¨ | Smaller reporting company ¨ |
Emerging growth company ¨ |
Page | |||||
PART I | |||||
Item 1. | Business | ||||
Item 1A. | Risk Factors | ||||
Item 1B. | Unresolved Staff Comments | ||||
Item 2. | Properties | ||||
Item 3. | Legal Proceedings | ||||
PART II | |||||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | ||||
Item 6. | Selected Financial Data | ||||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | ||||
Item 8. | Financial Statements and Supplementary Data | ||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | ||||
Item 9A. | Controls and Procedures | ||||
Item 9B. | Other Information | ||||
PART III | |||||
Item 10. | Directors, Executive Officers and Corporate Governance | ||||
Item 11. | Executive Compensation | ||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | ||||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | ||||
Item 14. | Principal Accounting Fees and Services | ||||
PART IV | |||||
Item 15. | Exhibits, Financial Statement Schedules |
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||||
Net sales: | (millions) | |||||||||||
Premium Fashion | $ | 2,317.8 | $ | 2,322.6 | $ | 2,330.9 | ||||||
Value Fashion | 1,820.5 | 1,950.2 | 2,094.6 | |||||||||
Plus Fashion | 1,340.0 | 1,353.9 | 1,463.6 | |||||||||
Kids Fashion | 1,100.0 | 1,023.1 | 1,106.3 | |||||||||
Total net sales | $ | 6,578.3 | $ | 6,649.8 | $ | 6,995.4 |
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||||
Operating income (loss): | (millions) | |||||||||||
Premium Fashion (a) | $ | 135.2 | $ | 140.9 | $ | 13.3 | ||||||
Value Fashion | (83.2 | ) | 12.2 | 92.0 | ||||||||
Plus Fashion | 27.1 | 15.5 | 36.9 | |||||||||
Kids Fashion | 39.1 | (36.7 | ) | 29.0 | ||||||||
Unallocated acquisition and integration expenses | (5.4 | ) | (39.4 | ) | (77.4 | ) | ||||||
Unallocated restructuring and other related charges | (78.5 | ) | (81.9 | ) | — | |||||||
Unallocated impairment of goodwill | — | (596.3 | ) | — | ||||||||
Unallocated impairment of intangible assets | — | (728.1 | ) | — | ||||||||
Total operating income (loss) | $ | 34.3 | $ | (1,313.8 | ) | $ | 93.8 |
(a.) | The results of the Premium Fashion segment for Fiscal 2016 include approximately $126.9 million of non-cash purchase accounting expense related to the amortization of the write-up of inventory to fair market value. |
• | Ann Taylor – www.anntaylor.com and factory.anntaylor.com |
• | LOFT – www.LOFT.com, outlet.loft.com and www.louandgrey.com |
• | maurices – www.maurices.com |
• | dressbarn – www.dressbarn.com |
• | Lane Bryant – www.lanebryant.com |
• | Catherines – www.catherines.com |
• | Justice – www.shopjustice.com |
Fiscal 2018 | ||||||||||||||||||||||||
Ann Taylor | LOFT | maurices | dressbarn | Lane Bryant | Catherines | Justice | Total | |||||||||||||||||
Beginning of Period | 322 | 678 | 1,005 | 779 | 764 | 359 | 900 | 4,807 | ||||||||||||||||
Opened | 1 | 8 | 14 | — | 2 | 1 | 2 | 28 | ||||||||||||||||
Closed | (19 | ) | (14 | ) | (47 | ) | (49 | ) | (17 | ) | (12 | ) | (55 | ) | (213 | ) | ||||||||
End of Period | 304 | 672 | 972 | 730 | 749 | 348 | 847 | 4,622 |
Fiscal 2017 | ||||||||||||||||||||||||
Ann Taylor | LOFT | maurices | dressbarn | Lane Bryant | Catherines | Justice | Total | |||||||||||||||||
Beginning of Period | 340 | 682 | 993 | 809 | 772 | 373 | 937 | 4,906 | ||||||||||||||||
Opened | 3 | 15 | 28 | 6 | 8 | 1 | 2 | 63 | ||||||||||||||||
Closed | (21 | ) | (19 | ) | (16 | ) | (36 | ) | (16 | ) | (15 | ) | (39 | ) | (162 | ) | ||||||||
End of Period | 322 | 678 | 1,005 | 779 | 764 | 359 | 900 | 4,807 |
Name | Age | Positions | ||
David Jaffe | 59 | Chief Executive Officer and Chairman of the Board | ||
Gary Muto | 59 | President and Chief Executive Officer-ascena Brands | ||
Brian Lynch | 61 | President and Chief Operating Officer | ||
Robb Giammatteo | 46 | Executive Vice President and Chief Financial Officer | ||
John Pershing | 47 | Executive Vice President, Chief Human Resources Officer | ||
Dan Lamadrid | 43 | Senior Vice President, Finance and Chief Accounting Officer |
• | higher than anticipated costs in implementing the program; |
• | failure to meet operational targets or customer requirements due to the loss of employees or inadequate transfer of knowledge; |
• | failure to maintain adequate controls and procedures while executing, and subsequent to completing, the Change for Growth program; |
• | diversion of management’s attention and resources from ongoing business activities and/or a decrease in employee morale; |
• | attrition beyond any planned reduction in workforce; and |
• | damage to our reputation and brand image due to our restructuring-related activities, including certain store closures. |
• | financial or political instability or terrorist acts in any of the countries in which we operate, outsource services or acquire our merchandise, or through which our merchandise passes; |
• | new and additional U.S. government initiatives may be proposed or implemented that may have an impact on the trading status of certain countries and may include retaliatory duties, tariffs or other trade sanctions that, if enacted, could increase the cost of products purchased from suppliers in such countries or restrict the importation of products from such countries; |
• | fluctuations in the value of the U.S. Dollar against foreign currencies or higher inflation rates in these countries, or restrictions on the transfer of funds to and from foreign countries; |
• | inability of our manufacturers to comply with local laws, including labor laws, health and safety laws or labor practices; |
• | increased security and regulatory requirements and inspections applicable to imported goods; |
• | changes to U.S. and foreign trade policies, including the enactment of tariffs, boarder adjustment taxes or increases in duties or quotas applicable to the merchandise we sell that could increase the cost and reduce the supply of products available to us; |
• | impact of natural disasters, extreme weather, public health concerns or other catastrophes on our foreign sourcing offices and vendor manufacturing operations; |
• | increase scrutiny in the U.S. utilizing labor based in foreign countries; |
• | delays in shipping due to port security or congestion issues, labor disputes or shortages, local business practices, vendor compliance with applicable import regulations or weather conditions; |
• | violations under the U.S. Foreign Corrupt Practices Act (the “FCPA”) or similar laws or regulations by us, our subsidiaries or our local agents; |
• | the adoption of new legislation or regulations in the U.S. or foreign countries that make it more difficult, more costly or impossible to continue our foreign activities; |
• | violation of applicable laws or regulations; and |
• | increased costs of transportation. |
• | system failures, including but not limited to, inadequate system capacity, human error, change in programming, website downtimes, system upgrades or migrations, Internet service or power outages; |
• | cyber incidents, including but not limited to, security breaches and computer viruses; |
• | reliance on third-party computer hardware/software fulfillment and delivery providers; |
• | unfavorable federal or state regulations or laws; |
• | violations of federal, state or other applicable laws, including those related to online privacy; |
• | disruptions in telecommunication systems, power outages or other technical failures; |
• | ability to anticipate and implement innovations in technology and logistics; |
• | credit card fraud; |
• | constantly evolving technology; |
• | liability for online content; |
• | challenges associated with recreating the in-store experience for our customers through our direct channels; and |
• | natural or man-made disasters or adverse weather conditions. |
• | successfully merge corporate cultures, operations and financial systems; |
• | realize cost reduction and operational synergies; |
• | retain key employees of acquired companies; |
• | retain existing customers of acquired companies; and |
• | complete the integration in a timely and cost efficient manner. |
Fiscal Years | Leases Expiring | Number with Renewal Options | Number without Renewal Options | |||
2019 | 1,130 | 272 | 858 | |||
2020 | 732 | 363 | 369 | |||
2021 | 623 | 346 | 277 | |||
2022 | 597 | 239 | 358 | |||
2023 | 509 | 232 | 277 | |||
2024 and thereafter | 1,031 | 493 | 538 | |||
Total | 4,622 | 1,945 | 2,677 |
• | a 280,000 square foot campus which serves as the corporate office for the Justice brand, located in New Albany, Ohio; |
• | a 202,000 square foot campus which serves as the corporate office for the dressbarn brand and for ascena located in Mahwah, NJ; |
• | a 200,000 square foot building which serves as the corporate office for the maurices brand and for a portion of the Company's brand services operations, located in Duluth, Minnesota; and |
• | a 168,000 square foot building which serves as the corporate office for the majority of the Company's brand services operations, located in Etna Township, Ohio, adjacent to our distribution center. |
Fiscal 2018 | Fiscal 2017 | |||||||
Fiscal | High | Low | High | Low | ||||
First Quarter | $2.67 | $1.69 | $9.02 | $4.75 | ||||
Second Quarter | $2.69 | $1.85 | $8.11 | $4.70 | ||||
Third Quarter | $2.50 | $1.79 | $5.41 | $3.64 | ||||
Fourth Quarter | $4.74 | $2.01 | $3.91 | $1.72 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(a) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a) | |||||||||
Month # 1 (April 29, 2018 – May 26, 2018) | — | $— | — | $181 million | |||||||||
Month # 2 (May 27, 2018 – June 30, 2018) | — | $— | — | $181 million | |||||||||
Month # 3 (July 1, 2018 – August 4, 2018) | — | $— | — | $181 million |
Fiscal Years Ended(a) | |||||||||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 (b) | July 25, 2015 (c) | July 26, 2014 | |||||||||||||||
(millions, except for share data) | |||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||
Net sales | $ | 6,578.3 | $ | 6,649.8 | $ | 6,995.4 | $ | 4,802.9 | $ | 4,790.6 | |||||||||
Acquisition and integration expenses | (5.4 | ) | (39.4 | ) | (77.4 | ) | (31.7 | ) | (34.0 | ) | |||||||||
Restructuring and other related charges | (78.5 | ) | (81.9 | ) | — | — | — | ||||||||||||
Impairment of goodwill (d) | — | (596.3 | ) | — | (261.7 | ) | — | ||||||||||||
Impairment of intangible assets (d) | — | (728.1 | ) | — | (44.7 | ) | (13.0 | ) | |||||||||||
Depreciation and amortization expense | (355.5 | ) | (384.9 | ) | (358.7 | ) | (218.2 | ) | (193.6 | ) | |||||||||
Operating income (loss) | 34.3 | (1,313.8 | ) | 93.8 | (234.9 | ) | 210.8 | ||||||||||||
Net (loss) income from continuing operations | (39.7 | ) | (1,067.3 | ) | (11.9 | ) | (236.8 | ) | 138.2 | ||||||||||
Net (loss) income from continuing operations per common share: | |||||||||||||||||||
Basic | $ | (0.20 | ) | $ | (5.48 | ) | $ | (0.06 | ) | $ | (1.46 | ) | $ | 0.86 | |||||
Diluted | $ | (0.20 | ) | $ | (5.48 | ) | $ | (0.06 | ) | $ | (1.46 | ) | $ | 0.84 | |||||
Balance sheet data: | |||||||||||||||||||
Cash and cash equivalents | $ | 238.9 | $ | 325.6 | $ | 371.8 | $ | 240.6 | $ | 156.9 | |||||||||
Working capital | 219.6 | 185.2 | 226.3 | 232.2 | 291.7 | ||||||||||||||
Total assets | 3,570.5 | 3,871.5 | 5,506.3 | 2,906.2 | 3,118.6 | ||||||||||||||
Total debt | 1,328.7 | 1,538.1 | 1,648.5 | 106.5 | 166.8 | ||||||||||||||
Total equity | 798.5 | 821.0 | 1,863.3 | 1,518.1 | 1,737.7 |
• | Overview. This section includes recent developments, our objectives and risks, and a summary of our financial performance for Fiscal 2018. |
• | Results of operations. This section provides an analysis of our operational results for Fiscal 2018, Fiscal 2017 and Fiscal 2016. |
• | Financial condition and liquidity. This section provides an analysis of our cash flows for Fiscal 2018, Fiscal 2017 and Fiscal 2016, as well as a discussion of our financial condition and liquidity as of August 4, 2018. The discussion of our financial condition and liquidity includes (i) our available financial capacity under our revolving credit agreement, (ii) a summary of our capital spending, and (iii) a summary of our contractual and other obligations as of August 4, 2018. |
• | Market risk management. This section discusses how we manage our risk exposures related to interest rates, foreign currency exchange rates and our investments, as well as the underlying market conditions as of August 4, 2018. |
• | Critical accounting policies. This section discusses accounting policies considered to be important to our operational results and financial condition, which require significant judgment and estimation on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 3 to our accompanying consolidated financial statements. |
• | Recently issued accounting pronouncements. This section discusses the potential impact to our reported operational results and financial condition of accounting standards that have been recently issued. |
• | Comparable sales decreased by 2%, reflecting declines at our Premium Fashion, Value Fashion and Plus Fashion segments offset in part by an increase at our Kids Fashion segment; |
• | Gross margin rate decreased by 40 basis points to 57.6% primarily reflecting incremental shipping costs of approximately $43 million across the segments as a result of increased mix of direct channel sales, and a 280 basis point decline at our dressbarn brand; |
• | SG&A expenses decreased by 1.5% and included $34.0 million of non-cash charges to write-down store-related fixed assets, primarily at our dressbarn brand; |
• | Operating income increased to $34.3 million compared to an operating loss of $1,313.8 million for the year-ago period, with the improvement primarily due to the impairment of goodwill and other intangible assets in the year-ago period; and |
• | Net loss per diluted share of $0.20 in Fiscal 2018, compared to net loss per diluted share of $5.48 for Fiscal 2017. |
• | Net cash from operations was $273.9 million, compared to $343.6 million in the year-ago period, primarily due to an increase in prepaid rent of approximately $50 million due to timing of payments; |
• | Net cash used in investing activities for Fiscal 2018 was $134.4 million, consisting primarily of capital expenditures of $186.3 million offset in part by proceeds from the sale of assets, compared to $268.9 million in the year-ago period, consisting primarily of capital expenditures of $258.1 million; and |
• | Net cash used in financing activities for Fiscal 2018 was $226.2 million, consisting primarily of term loan repayments of $225.0 million, compared to $120.9 million in the year-ago period, consisting primarily of term loan repayments of $122.5 million. |
Fiscal Years Ended | |||||||||||||||
August 4, 2018 | July 29, 2017 | $ Change | % Change | ||||||||||||
(millions, except per share data) | |||||||||||||||
Net sales | $ | 6,578.3 | $ | 6,649.8 | $ | (71.5 | ) | (1.1 | )% | ||||||
Cost of goods sold | (2,786.8 | ) | (2,790.2 | ) | 3.4 | 0.1 | % | ||||||||
Cost of goods sold as % of net sales | 42.4 | % | 42.0 | % | |||||||||||
Gross margin | 3,791.5 | 3,859.6 | (68.1 | ) | (1.8 | )% | |||||||||
Gross margin as % of net sales | 57.6 | % | 58.0 | % | |||||||||||
Other operating expenses: | |||||||||||||||
Buying, distribution and occupancy expenses | (1,281.1 | ) | (1,274.3 | ) | (6.8 | ) | (0.5 | )% | |||||||
Buying, distribution and occupancy expenses as % of net sales | 19.5 | % | 19.2 | % | |||||||||||
Selling, general and administrative expenses | (2,036.7 | ) | (2,068.5 | ) | 31.8 | 1.5 | % | ||||||||
SG&A expenses as % of net sales | 31.0 | % | 31.1 | % | |||||||||||
Acquisition and integration expenses | (5.4 | ) | (39.4 | ) | 34.0 | 86.3 | % | ||||||||
Restructuring and other related charges | (78.5 | ) | (81.9 | ) | 3.4 | 4.2 | % | ||||||||
Impairment of goodwill | — | (596.3 | ) | 596.3 | NM | ||||||||||
Impairment of intangible assets | — | (728.1 | ) | 728.1 | NM | ||||||||||
Depreciation and amortization expense | (355.5 | ) | (384.9 | ) | 29.4 | 7.6 | % | ||||||||
Total other operating expenses | (3,757.2 | ) | (5,173.4 | ) | 1,416.2 | 27.4 | % | ||||||||
Operating income (loss) | 34.3 | (1,313.8 | ) | 1,348.1 | NM | ||||||||||
Operating income (loss) as % of net sales | 0.5 | % | (19.8 | )% | |||||||||||
Interest expense | (113.0 | ) | (102.2 | ) | (10.8 | ) | (10.6 | )% | |||||||
Interest and other income, net | 2.2 | 1.8 | 0.4 | 22.2 | % | ||||||||||
Loss on extinguishment of debt | (5.0 | ) | — | (5.0 | ) | NM | |||||||||
Loss before benefit for income taxes | (81.5 | ) | (1,414.2 | ) | 1,332.7 | 94.2 | % | ||||||||
Benefit for income taxes | 41.8 | 346.9 | (305.1 | ) | (88.0 | )% | |||||||||
Effective tax rate (a) | 51.3 | % | 24.5 | % | |||||||||||
Net loss | $ | (39.7 | ) | $ | (1,067.3 | ) | $ | 1,027.6 | 96.3 | % | |||||
Net loss per common share: | |||||||||||||||
Basic | $ | (0.20 | ) | $ | (5.48 | ) | $ | 5.28 | 96.3 | % | |||||
Diluted | $ | (0.20 | ) | $ | (5.48 | ) | $ | 5.28 | 96.3 | % |
Fiscal Years Ended | |||||||||||||||
August 4, 2018 | July 29, 2017 | $ Change | % Change | ||||||||||||
(millions) | |||||||||||||||
Net sales: | |||||||||||||||
Premium Fashion | $ | 2,317.8 | $ | 2,322.6 | $ | (4.8 | ) | (0.2 | )% | ||||||
Value Fashion | 1,820.5 | 1,950.2 | (129.7 | ) | (6.7 | )% | |||||||||
Plus Fashion | 1,340.0 | 1,353.9 | (13.9 | ) | (1.0 | )% | |||||||||
Kids Fashion | 1,100.0 | 1,023.1 | 76.9 | 7.5 | % | ||||||||||
Total net sales | $ | 6,578.3 | $ | 6,649.8 | $ | (71.5 | ) | (1.1 | )% | ||||||
Comparable sales (a)(b)(c) | (2 | )% |
(c) | During Fiscal 2018, vouchers distributed in the first quarter of Fiscal 2018 in connection with the Justice pricing litigation, discussed more fully in Note 15 to the accompanying consolidated financial statements, began to be redeemed. Comparable sales related to these transactions includes the transaction value in excess of the voucher value. |
• | a 5% comparable sales decline of $37.3 million at Ann Taylor, and a less than 1% comparable sales decline of $7.3 million at LOFT; |
• | a $4.9 million increase in non-comparable sales primarily reflecting a net positive impact at LOFT, as the impact of 8 store openings more than offset the impact of 14 store closures, which was offset in part by the negative impact of 18 net store closures at Ann Taylor; |
• | a $24.6 million increase due to the inclusion of the 53rd week period; and |
• | a $10.3 million increase in other revenues primarily related to higher gift card breakage and higher credit revenue. |
• | a 10% comparable sales decline of $86.8 million at dressbarn and a 4% comparable sales decline of $35.2 million at maurices; |
• | a $38.2 million decline in non-comparable sales substantially all at dressbarn reflecting 49 store closures; |
• | a $32.6 million increase due to the inclusion of the 53rd week period; and |
• | a $2.1 million decline in other revenues. |
• | a 1% comparable sales decline of $7.9 million at Lane Bryant and a 3% comparable sales decline of $9.6 million at Catherines; |
• | an $11.0 million decline in non-comparable sales at Lane Bryant due to 15 net store closures and a $7.0 million decline in non-comparable sales at Catherines due to 11 net store closures; |
• | a $20.7 million increase due to the inclusion of the 53rd week period; and |
• | a $0.9 million increase in other revenues. |
• | a 7% comparable sales increase of $67.4 million at Justice; |
• | a $21.7 million decline in non-comparable sales primarily due to 53 net store closures; |
• | a $35.1 million increase due to the inclusion of the 53rd week period; and |
• | a $3.9 million decline in other revenues primarily due to lower wholesale revenue. |
• | Premium Fashion gross margin rate performance declined by approximately 60 basis points, reflecting higher shipping costs related to increased direct channel penetration and an increased level of promotional selling resulting from soft product acceptance during the first half of Fiscal 2018, offset in part by the segment's cost of goods sold initiative. |
• | Value Fashion gross margin rate performance declined approximately 150 basis, points caused primarily by a 280 basis point decline at dressbarn. The decline mainly reflects higher markdown requirements to maintain appropriate inventory levels, a higher level of promotional selling, particularly at dressbarn, due to lower than expected customer demand, and higher shipping costs related to the increased direct channel penetration. |
• | Plus Fashion gross margin rate performance improved by approximately 30 basis points, reflecting improved product acceptance and lower levels of promotional selling, offset in part by higher shipping costs related to the increased direct channel penetration. |
• | Kids Fashion gross margin rate performance improved approximately 90 basis points, resulting from improved product acceptance, offset in part by incremental freight expenses necessary to meet higher product demand. |
Fiscal Years Ended | |||||||||||||||
August 4, 2018 | July 29, 2017 | $ Change | % Change | ||||||||||||
(millions) | |||||||||||||||
Operating income (loss): | |||||||||||||||
Premium Fashion | $ | 135.2 | $ | 140.9 | $ | (5.7 | ) | (4.0 | )% | ||||||
Value Fashion | (83.2 | ) | 12.2 | (95.4 | ) | NM | |||||||||
Plus Fashion | 27.1 | 15.5 | 11.6 | 74.8 | % | ||||||||||
Kids Fashion | 39.1 | (36.7 | ) | 75.8 | NM | ||||||||||
Unallocated acquisition and integration expenses | (5.4 | ) | (39.4 | ) | 34.0 | 86.3 | % | ||||||||
Unallocated restructuring and other related charges | (78.5 | ) | (81.9 | ) | 3.4 | 4.2 | % | ||||||||
Unallocated impairment of goodwill | — | (596.3 | ) | 596.3 | NM | ||||||||||
Unallocated impairment of intangible assets | — | (728.1 | ) | 728.1 | NM | ||||||||||
Total operating income (loss) | $ | 34.3 | $ | (1,313.8 | ) | $ | 1,348.1 | NM |
Fiscal Years Ended | |||||||||||||||
July 29, 2017 | July 30, 2016 | $ Change | % Change | ||||||||||||
(millions, except per share data) | |||||||||||||||
Net sales | $ | 6,649.8 | $ | 6,995.4 | $ | (345.6 | ) | (4.9 | )% | ||||||
Cost of goods sold | (2,790.2 | ) | (3,066.7 | ) | 276.5 | 9.0 | % | ||||||||
Cost of goods sold as % of net sales | 42.0 | % | 43.8 | % | |||||||||||
Gross margin | 3,859.6 | 3,928.7 | (69.1 | ) | (1.8 | )% | |||||||||
Gross margin as % of net sales | 58.0 | % | 56.2 | % | |||||||||||
Other operating expenses: | |||||||||||||||
Buying, distribution and occupancy expenses | (1,274.3 | ) | (1,286.5 | ) | 12.2 | 0.9 | % | ||||||||
Buying, distribution and occupancy expenses as % of net sales | 19.2 | % | 18.4 | % | |||||||||||
Selling, general and administrative expenses | (2,068.5 | ) | (2,112.3 | ) | 43.8 | 2.1 | % | ||||||||
SG&A expenses as % of net sales | 31.1 | % | 30.2 | % | |||||||||||
Acquisition and integration expenses | (39.4 | ) | (77.4 | ) | 38.0 | 49.1 | % | ||||||||
Restructuring and other related charges | (81.9 | ) | — | (81.9 | ) | NM | |||||||||
Impairment of goodwill | (596.3 | ) | — | (596.3 | ) | NM | |||||||||
Impairment of intangible assets | (728.1 | ) | — | (728.1 | ) | NM | |||||||||
Depreciation and amortization expense | (384.9 | ) | (358.7 | ) | (26.2 | ) | (7.3 | )% | |||||||
Total other operating expenses | (5,173.4 | ) | (3,834.9 | ) | (1,338.5 | ) | (34.9 | )% | |||||||
Operating (loss) income | (1,313.8 | ) | 93.8 | (1,407.6 | ) | NM | |||||||||
Operating (loss) income as % of net sales | (19.8 | )% | 1.3 | % | |||||||||||
Interest expense | (102.2 | ) | (103.3 | ) | 1.1 | 1.1 | % | ||||||||
Interest and other income, net | 1.8 | 0.4 | 1.4 | 350.0 | % | ||||||||||
Gain on extinguishment of debt | — | 0.8 | (0.8 | ) | NM | ||||||||||
Loss before benefit for income taxes | (1,414.2 | ) | (8.3 | ) | (1,405.9 | ) | NM | ||||||||
Benefit (Provision) for income taxes | 346.9 | (3.6 | ) | 350.5 | NM | ||||||||||
Effective tax rate (a) | 24.5 | % | (43.4 | )% | |||||||||||
Net loss | $ | (1,067.3 | ) | $ | (11.9 | ) | $ | (1,055.4 | ) | NM | |||||
Net loss per common share: | |||||||||||||||
Basic | $ | (5.48 | ) | $ | (0.06 | ) | $ | (5.42 | ) | NM | |||||
Diluted | $ | (5.48 | ) | $ | (0.06 | ) | $ | (5.42 | ) | NM |
Fiscal Years Ended | |||||||||||||||
July 29, 2017 | July 30, 2016 | $ Change | % Change | ||||||||||||
(millions) | |||||||||||||||
Net sales: | |||||||||||||||
Premium Fashion | $ | 2,322.6 | $ | 2,330.9 | $ | (8.3 | ) | (0.4 | )% | ||||||
Value Fashion | 1,950.2 | 2,094.6 | (144.4 | ) | (6.9 | )% | |||||||||
Plus Fashion | 1,353.9 | 1,463.6 | (109.7 | ) | (7.5 | )% | |||||||||
Kids Fashion | 1,023.1 | 1,106.3 | (83.2 | ) | (7.5 | )% | |||||||||
Total net sales | $ | 6,649.8 | $ | 6,995.4 | $ | (345.6 | ) | (4.9 | )% | ||||||
Comparable sales (a) | (5 | )% |
• | a 52-week period compared to the 49-week post-acquisition period in Fiscal 2016; |
• | a 7% comparable sales decline at Ann Taylor and a 4% comparable sales decline at LOFT; and |
• | 18 net store closures at Ann Taylor and 4 net store closures at LOFT. |
• | a 9% comparable sales decline of $88.7 million at maurices and a 5% comparable sales decline of $46.6 million at dressbarn; |
• | a $22.4 million increase in non-comparable sales due to 12 net store openings at maurices, offset in part by a $19.8 million decline in non-comparable sales due to 30 net store closures at dressbarn; |
• | a $34.5 million decline due to the inclusion of the 53rd week in Fiscal 2016; and |
• | a $22.8 million increase in other revenues primarily due to the segment's new private label credit card program. |
• | a 7% comparable sales decline of $67.3 million at Lane Bryant and a 4% comparable sales decline of $11.3 million at Catherines; |
• | a $2.3 million decline in non-comparable sales due to 8 net store closures at Lane Bryant and 14 net store closures at Catherines; |
• | a $23.0 million decline due to the inclusion of the 53rd week in Fiscal 2016; and |
• | a $5.8 million decline in other revenues due to lower revenue from product sell-off and gift card breakage. |
• | a 3% comparable sales decline of $26.3 million at Justice; |
• | a $23.8 million decline in non-comparable sales caused by 37 net store closures; |
• | a $24.9 million decline due to the inclusion of the 53rd week in Fiscal 2016; and |
• | a $8.2 million decline in other revenues due to lower wholesale and licensing revenue. |
• | Premium Fashion gross margin rate performance reflected an approximate $127 million non-cash purchase accounting expense related to the amortization of the write-up of inventory recorded during Fiscal 2016 discussed above. Excluding the prior year impact of the inventory amortization, gross margin rate performance improved by approximately 220 basis points, reflecting significant improvement at both Ann Taylor and LOFT. Both brands benefited from realization of freight cost synergies related to our ongoing supply chain integration and the segment's cost of goods sold initiative. |
• | Value Fashion gross margin rate performance declined approximately 110 basis points, resulting from a higher level of promotional selling across the segment and increased markdown requirements to maintain appropriate inventory levels on lower than expected customer demand. |
• | Plus Fashion gross margin rate performance improved by approximately 120 basis points, mainly due to more effective inventory management at both Lane Bryant and Catherines. |
• | Kids Fashion gross margin rate performance declined approximately 370 basis points, resulting from a higher level of promotional selling and increased markdown requirements to maintain appropriate inventory levels on lower than expected customer demand. |
Fiscal Years Ended | |||||||||||||||
July 29, 2017 | July 30, 2016 | $ Change | % Change | ||||||||||||
(millions) | |||||||||||||||
Operating (loss) income: | |||||||||||||||
Premium Fashion | $ | 140.9 | $ | 13.3 | $ | 127.6 | NM | ||||||||
Value Fashion | 12.2 | 92.0 | (79.8 | ) | (86.7 | )% | |||||||||
Plus Fashion | 15.5 | 36.9 | (21.4 | ) | (58.0 | )% | |||||||||
Kids Fashion | (36.7 | ) | 29.0 | (65.7 | ) | (226.6 | )% | ||||||||
Unallocated acquisition and integration expenses | (39.4 | ) | (77.4 | ) | 38.0 | 49.1 | % | ||||||||
Unallocated restructuring and other related charges | (81.9 | ) | — | (81.9 | ) | NM | |||||||||
Unallocated impairment of goodwill | (596.3 | ) | — | (596.3 | ) | NM | |||||||||
Unallocated impairment of intangible assets | (728.1 | ) | — | (728.1 | ) | NM | |||||||||
Total operating (loss) income | $ | (1,313.8 | ) | $ | 93.8 | $ | (1,407.6 | ) | NM |
Fiscal Years Ended | ||||||||
August 4, 2018 | July 29, 2017 | |||||||
(millions) | ||||||||
Net cash provided by operating activities | $ | 273.9 | $ | 343.6 | ||||
Net cash used in investing activities | (134.4 | ) | (268.9 | ) | ||||
Net cash used in financing activities | (226.2 | ) | (120.9 | ) | ||||
Net decrease in cash and cash equivalents | $ | (86.7 | ) | $ | (46.2 | ) |
Fiscal Years Ended | ||||||||
July 29, 2017 | July 30, 2016 | |||||||
(millions) | ||||||||
Net cash provided by operating activities | $ | 343.6 | $ | 445.4 | ||||
Net cash used in investing activities | (268.9 | ) | (1,835.7 | ) | ||||
Net cash (used in) provided by financing activities | (120.9 | ) | 1,521.5 | |||||
Net (decrease) increase in cash and cash equivalents | $ | (46.2 | ) | $ | 131.2 |
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Fiscal 2019 | Fiscal 2020- 2021 | Fiscal 2022- 2023 | Fiscal 2024 and Thereafter | Total | |||||||||||||||
(millions) | ||||||||||||||||||||
Long-term debt | $ | — | $ | 66.5 | $ | 1,305.0 | $ | — | $ | 1,371.5 | ||||||||||
Interest payments on long-term debt | 90.9 | 179.9 | 89.5 | — | 360.3 | |||||||||||||||
Operating leases | 554.4 | 895.3 | 621.2 | 661.0 | 2,731.9 | |||||||||||||||
Inventory purchase commitments | 810.9 | 0.4 | — | — | 811.3 | |||||||||||||||
Other commitments | 46.2 | 36.6 | 3.2 | 2.3 | 88.3 | |||||||||||||||
Total | $ | 1,502.4 | $ | 1,178.7 | $ | 2,018.9 | $ | 663.3 | $ | 5,363.3 |
• | Long-term debt represents contractual payments of outstanding borrowings under our borrowing agreements as of August 4, 2018. |
• | Interest payments on long-term debt represent interest payments related to our borrowing agreements. Interest payments on our Term Loan were calculated based on the interest rates in effect as of August 4, 2018 and the estimated outstanding balance, giving effect to the contractual repayments in future periods. Interest payments on our Amended Revolving Credit Agreement, if any, were calculated based on the outstanding balance and the interest rates in effect as of August 4, 2018, as if the borrowings remain outstanding until repayment is required at expiration in February 2023. |
• | Operating lease obligations represent the estimated minimum lease rental payments for our real estate and operating equipment in various locations around the world and do not include incremental rentals based on a percentage of sales. Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under these cancelable leases have been included in the above table. In addition to such amounts, we are normally required to pay taxes, insurance and occupancy costs relating to the leased real estate properties, which are not included in the table above. |
• | Inventory purchase commitments represent our agreements to purchase fixed or minimum quantities of goods at determinable prices. While a portion of these commitments may be canceled at our option up to 30 days prior to the vendor’s scheduled shipment date, such commitments are generally not canceled and are included in the table above. |
• | Other commitments primarily represent contractual payments related to information technology services. While these commitments may be canceled at our option for a termination fee, such commitments are generally not canceled and are included in the table above. |
(a) | (b) | (c) | ||||||||
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options | Weighted-Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)(1)) | |||||||
Equity compensation plans approved by security holders | 19,307,945 | $ | 8.97 | 9,739,708 | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||
Total | 19,307,945 | $ | 8.97 | 9,739,708 |
Exhibit Number | Description | |
Second Amended and Restated Certificate of Incorporation of Ascena Retail Group, Inc. is incorporated by reference to Annex II to the Proxy Statement dated November 18, 2010 (File No. 333-168953). | ||
Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Ascena Retail Group, Inc. is incorporated by reference to Exhibit 3.1 to the Form 8-K filed on January 3, 2011 (File No. 333-168953). | ||
Amended and Restated By-Laws of Ascena Retail Group, Inc., adopted March 4, 2015, are incorporated by reference to Exhibit 3.1 to the Form 8-K filed on March 6, 2015. | ||
Amendment to Amended and Restated By-Laws of Ascena Retail Group, Inc., adopted November 2, 2015, is incorporated by reference to Exhibit 3.1 to the Form 8-K filed on November 3, 2015. | ||
Ascena Retail Group, Inc., 2016 Omnibus Incentive Plan is incorporated by reference to Annex A to the Proxy Statement dated November 3, 2015.* | ||
Amended and Restated Executive 162(m) Bonus Plan, effective as of December 12, 2013, is incorporated by reference to Annex A to the Proxy Statement dated November 5, 2013.* | ||
Employment Agreement dated May 2, 2002 with Elliot S. Jaffe is incorporated by reference to Exhibit 10(u)(u) to the Form 10-K filed for the fiscal year ended July 27, 2002 (File No. 000-11736).* | ||
Amendment dated July 10, 2006 to Employment Agreement dated May 2, 2002 with Elliot S. Jaffe is incorporated by reference to Exhibit 99.1 to the Form 8-K filed on July 13, 2006 (File No. 000-11736).* | ||
Employment Letter dated January 23, 2015 with John Pershing is incorporated by reference to Exhibit 10.6 to the Form 10-K filed for the fiscal year ended July 25, 2015.* | ||
Employment Letter dated July 20, 2015 with Robb Giammatteo is incorporated by reference to Exhibit 10.7 to the Form 10-K filed for the fiscal year ended July 25, 2015.* | ||
Supplemental Retirement Benefit Agreement dated August 29, 2006 with Mrs. Roslyn Jaffe is incorporated by reference to Exhibit 99.1 to the Form 8-K filed on August 30, 2006 (File No. 000-11736).* | ||
Form of Indemnification Agreement, adopted January 1, 2011, for Members of the Board of Directors and certain executive officers is incorporated by reference to Exhibit 10.24 to the Form 10-K filed for the fiscal year ended July 30, 2011.* | ||
Fifth Amendment and Restatement Agreement dated and effective as of February 27, 2018, among the Company, the Borrowing Subsidiaries party thereto, the Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, together with the exhibits and schedules thereto, is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on March 5, 2018. | ||
Term Credit Agreement dated as of August 21, 2015 among the Company, AnnTaylor Retail, Inc., the Lenders party thereto and Goldman Sachs Bank USA, as Administrative Agent, is incorporated by reference to Exhibit 10.2 to the Form 8-K filed on August 27, 2015. | ||
Employment Letter dated October 4, 2016 with Brian Lynch is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on October 7, 2016.* | ||
Ascena Retail Group, Inc. Transformation Bonus Program Terms and Conditions under the Ascena Retail Group, Inc. 2016 Omnibus Incentive Plan (as Amended and Restated effective December 10, 2015) effective as of March 30, 2017, is incorporated by reference to Exhibit 10.17 to the Form 10-K for the fiscal year ended July 29, 2017.* | ||
Exhibit Number | Description | |
Form of Award Agreement pursuant to the Ascena Retail Group, Inc. Transformation Bonus Program under the 2016 Omnibus Incentive Plan (as Amended and Restated effective December 10, 2015) effective as of March 30, 2017, is incorporated by reference to Exhibit 10.18 to the Form 10-K for the fiscal year ended July 29, 2017.* | ||
Amended and Restated Credit Card Program Agreement dated April 28, 2017, by and between Ascena Retail Group, Inc. and Capital One, National Association, is incorporated by reference to Exhibit 10.1 to the Form 10-Q for the fiscal quarter ended April 29, 2017. | ||
Ascena Retail Group, Inc. Executive Severance Plan, Amended and Restated effective as of June 8, 2017, is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on June 8, 2017.* | ||
Employment Letter dated July 29, 2017 with David Jaffe is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on August 1, 2017.* | ||
Employment Letter dated June 12, 2017 with Brian Lynch is incorporated by reference to Exhibit 10.2 to the Form 8-K filed on August 1, 2017.* | ||
Employment Letter dated June 1, 2017 with Gary Muto is incorporated by reference to Exhibit 10.3 to the Form 8-K filed on August 1, 2017.* | ||
Employment Letter dated August 23, 2017 with Dan Lamadrid is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on August 28, 2017.* | ||
Code of Ethics for the Chief Executive Officer and Senior Financial Officers is incorporated by reference to Exhibit 14 to the Form 10-K filed for the fiscal year ended July 26, 2003 (File No. 000-11736). | ||
Subsidiaries of the Registrant, filed herewith. | ||
Consent of Independent Registered Public Accounting Firm, filed herewith. | ||
Section 302 Certification of President and Chief Executive Officer, filed herewith. | ||
Section 302 Certification of Chief Financial Officer, filed herewith. | ||
Section 906 Certification of President and Chief Executive Officer, filed herewith.** | ||
Section 906 Certification of Chief Financial Officer, filed herewith.** |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document† |
Ascena Retail Group, Inc. | |||
Date: September 24, 2018 | by | /s/ DAVID JAFFE | |
David Jaffe | |||
Chief Executive Officer |
Signature | Title | Date | ||
/s/ DAVID JAFFE | ||||
David Jaffe | Chief Executive Officer, Chairman of the Board of Directors and Director (Principal Executive Officer) | September 24, 2018 | ||
/s/ ROBB GIAMMATTEO | ||||
Robb Giammatteo | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | September 24, 2018 | ||
/s/ DAN LAMADRID | ||||
Dan Lamadrid | Senior Vice President Finance and Chief Accounting Officer (Principal Accounting Officer) | September 24, 2018 | ||
/s/ KATIE J. BAYNE | ||||
Katie J. Bayne | Director | September 24, 2018 | ||
/s/ KATE BUGGELN | ||||
Kate Buggeln | Director | September 24, 2018 | ||
/s/ STEVEN L. KIRSHENBAUM | ||||
Steven L. Kirshenbaum | Director | September 24, 2018 | ||
/s/ KATHERINE L. KRILL | ||||
Katherine L. Krill | Director | September 24, 2018 | ||
/s/ MARC LASRY | ||||
Marc Lasry | Director | September 24, 2018 | ||
/s/ RANDY L. PEARCE | ||||
Randy L. Pearce | Director | September 24, 2018 | ||
/s/ STACEY RAUCH | ||||
Stacey Rauch | Director | September 24, 2018 | ||
/s/ CARL S. RUBIN | ||||
Carl S. Rubin | Director | September 24, 2018 | ||
/s/ JOHN L. WELBORN, JR. | ||||
John L. Welborn, Jr. | Director | September 24, 2018 | ||
/s/ LINDA YACCARINO | ||||
Linda Yaccarino | Director | September 24, 2018 |
Page | |
Consolidated Financial Statements: | |
Consolidated Balance Sheets | F-2 |
Consolidated Statements of Operations | F-3 |
Consolidated Statements of Comprehensive Loss | F-4 |
Consolidated Statements of Cash Flows | F-5 |
Consolidated Statements of Equity | F-6 |
Notes to Consolidated Financial Statements | F-7 |
Reports of Independent Registered Public Accounting Firm | F-44 |
Supplementary Information: | |
Quarterly Financial Information (Unaudited) | F-46 |
August 4, 2018 | July 29, 2017 | |||||||
(millions, except per share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 238.9 | $ | 325.6 | ||||
Inventories | 622.9 | 639.3 | ||||||
Prepaid expenses and other current assets | 248.5 | 157.4 | ||||||
Total current assets | 1,110.3 | 1,122.3 | ||||||
Property and equipment, net | 1,205.3 | 1,437.6 | ||||||
Goodwill | 683.0 | 683.0 | ||||||
Other intangible assets, net | 516.0 | 532.4 | ||||||
Other assets | 55.9 | 96.2 | ||||||
Total assets | $ | 3,570.5 | $ | 3,871.5 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 437.6 | $ | 411.6 | ||||
Accrued expenses and other current liabilities | 326.3 | 352.9 | ||||||
Deferred income | 121.7 | 121.5 | ||||||
Income taxes payable | 5.1 | 7.1 | ||||||
Current portion of long-term debt | — | 44.0 | ||||||
Total current liabilities | 890.7 | 937.1 | ||||||
Long-term debt | 1,328.7 | 1,494.1 | ||||||
Lease-related liabilities | 315.2 | 348.3 | ||||||
Deferred income taxes | 29.6 | 79.3 | ||||||
Other non-current liabilities | 207.8 | 191.7 | ||||||
Total liabilities | 2,772.0 | 3,050.5 | ||||||
Commitments and contingencies (Note 15) | ||||||||
Equity: | ||||||||
Common stock, par value $0.01 per share; 196.3 and 195.1 million shares issued and outstanding | 2.0 | 2.0 | ||||||
Additional paid-in capital | 1,088.2 | 1,068.2 | ||||||
Accumulated deficit | (278.8 | ) | (238.8 | ) | ||||
Accumulated other comprehensive loss | (12.9 | ) | (10.4 | ) | ||||
Total equity | 798.5 | 821.0 | ||||||
Total liabilities and equity | $ | 3,570.5 | $ | 3,871.5 |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
(millions, except per share data) | ||||||||||||
Net sales | $ | 6,578.3 | $ | 6,649.8 | $ | 6,995.4 | ||||||
Cost of goods sold | (2,786.8 | ) | (2,790.2 | ) | (3,066.7 | ) | ||||||
Gross margin | 3,791.5 | 3,859.6 | 3,928.7 | |||||||||
Other operating expenses: | ||||||||||||
Buying, distribution and occupancy expenses | (1,281.1 | ) | (1,274.3 | ) | (1,286.5 | ) | ||||||
Selling, general and administrative expenses | (2,036.7 | ) | (2,068.5 | ) | (2,112.3 | ) | ||||||
Acquisition and integration expenses | (5.4 | ) | (39.4 | ) | (77.4 | ) | ||||||
Restructuring and other related charges | (78.5 | ) | (81.9 | ) | — | |||||||
Impairment of goodwill | — | (596.3 | ) | — | ||||||||
Impairment of intangible assets | — | (728.1 | ) | — | ||||||||
Depreciation and amortization expense | (355.5 | ) | (384.9 | ) | (358.7 | ) | ||||||
Total other operating expenses | (3,757.2 | ) | (5,173.4 | ) | (3,834.9 | ) | ||||||
Operating income (loss) | 34.3 | (1,313.8 | ) | 93.8 | ||||||||
Interest expense | (113.0 | ) | (102.2 | ) | (103.3 | ) | ||||||
Interest and other income, net | 2.2 | 1.8 | 0.4 | |||||||||
(Loss) gain on extinguishment of debt | (5.0 | ) | — | 0.8 | ||||||||
Loss before benefit (provision) for income taxes | (81.5 | ) | (1,414.2 | ) | (8.3 | ) | ||||||
Benefit (provision) for income taxes | 41.8 | 346.9 | (3.6 | ) | ||||||||
Net loss | $ | (39.7 | ) | $ | (1,067.3 | ) | $ | (11.9 | ) | |||
Net loss per common share: | ||||||||||||
Basic | $ | (0.20 | ) | $ | (5.48 | ) | $ | (0.06 | ) | |||
Diluted | $ | (0.20 | ) | $ | (5.48 | ) | $ | (0.06 | ) | |||
Weighted average common shares outstanding: | ||||||||||||
Basic | 196.0 | 194.8 | 192.2 | |||||||||
Diluted | 196.0 | 194.8 | 192.2 |
Fiscal Years Ended | |||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | |||||||||
(millions) | |||||||||||
Net loss | $ | (39.7 | ) | $ | (1,067.3 | ) | $ | (11.9 | ) | ||
Other comprehensive (loss) income, net of tax: | |||||||||||
Net actuarial loss on a defined benefit pension plan, net of income tax benefit of $0.4 million and $2.5 million, respectively | — | (0.7 | ) | (3.8 | ) | ||||||
Foreign currency translation adjustment | (2.5 | ) | 3.5 | (1.3 | ) | ||||||
Total other comprehensive (loss) income before reclassification | (2.5 | ) | 2.8 | (5.1 | ) | ||||||
Reclassification of settlement charges for ANN's pension plan, net of income tax benefit of $2.9 million | — | 4.5 | — | ||||||||
Total comprehensive loss | $ | (42.2 | ) | $ | (1,060.0 | ) | $ | (17.0 | ) |
Fiscal Years Ended | |||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | |||||||||
(millions) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (39.7 | ) | $ | (1,067.3 | ) | $ | (11.9 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | 355.5 | 384.9 | 358.7 | ||||||||
Deferred income tax benefit | (47.1 | ) | (371.3 | ) | (26.8 | ) | |||||
Deferred rent and other occupancy costs | (47.1 | ) | (62.7 | ) | (74.4 | ) | |||||
Loss (gain) on extinguishment of debt | 5.0 | — | (0.8 | ) | |||||||
Gain on sale of fixed assets | (1.6 | ) | — | — | |||||||
Amortization of acquisition-related inventory write-up | — | — | 126.9 | ||||||||
Stock-based compensation expense | 19.8 | 24.5 | 26.2 | ||||||||
Impairment of tangible assets | 49.2 | 35.6 | 13.3 | ||||||||
Impairment of goodwill | — | 596.3 | — | ||||||||
Impairment of other intangible assets | — | 728.1 | — | ||||||||
Non-cash interest expense | 11.9 | 12.1 | 11.3 | ||||||||
Other non-cash expense (income), net | 0.2 | 10.9 | (0.9 | ) | |||||||
Excess tax benefits from stock-based compensation | — | — | (1.5 | ) | |||||||
Changes in operating assets and liabilities: | |||||||||||
Inventories | 16.4 | 10.0 | 111.4 | ||||||||
Accounts payable, accrued liabilities and income taxes payable | (11.2 | ) | (26.0 | ) | (133.6 | ) | |||||
Deferred income | 13.0 | 15.6 | 7.8 | ||||||||
Lease-related liabilities | 20.9 | 31.4 | 52.5 | ||||||||
Other balance sheet changes, net | (71.3 | ) | 21.5 | (12.8 | ) | ||||||
Net cash provided by operating activities | 273.9 | 343.6 | 445.4 | ||||||||
Cash flows from investing activities: | |||||||||||
Cash paid for the acquisition of ANN INC., net of cash acquired | — | — | (1,494.6 | ) | |||||||
Capital expenditures | (186.3 | ) | (258.1 | ) | (366.5 | ) | |||||
Acquisition of intangible assets | — | (11.6 | ) | — | |||||||
Proceeds from the sale of assets | 14.6 | — | — | ||||||||
Purchases of investments | — | — | (1.1 | ) | |||||||
Proceeds from the settlement of corporate-owned life insurance policies | 37.5 | — | — | ||||||||
Proceeds from sales and maturities of investments | — | 0.8 | 26.5 | ||||||||
Other investing activities | (0.2 | ) | — | — | |||||||
Net cash used in investing activities | (134.4 | ) | (268.9 | ) | (1,835.7 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolver borrowings | 553.5 | 1,221.9 | 1,510.5 | ||||||||
Repayments of revolver borrowings | (553.5 | ) | (1,221.9 | ) | (1,626.5 | ) | |||||
Proceeds from term loan, net of original issue discount | — | — | 1,764.0 | ||||||||
Redemptions and repayments of term loan | (225.0 | ) | (122.5 | ) | (77.4 | ) | |||||
Payment of deferred financing costs | (1.3 | ) | — | (42.6 | ) | ||||||
Purchases and retirements of common stock | — | — | (18.6 | ) | |||||||
Proceeds from stock options exercised and employee stock purchases | 0.4 | 1.6 | 10.6 | ||||||||
Tax payments related to share-based awards | (0.3 | ) | — | — | |||||||
Excess tax benefits from stock-based compensation | — | — | 1.5 | ||||||||
Net cash (used in) provided by financing activities | (226.2 | ) | (120.9 | ) | 1,521.5 | ||||||
Net (decrease) increase in cash and cash equivalents | (86.7 | ) | (46.2 | ) | 131.2 | ||||||
Cash and cash equivalents at beginning of year | 325.6 | 371.8 | 240.6 | ||||||||
Cash and cash equivalents at end of year | $ | 238.9 | $ | 325.6 | $ | 371.8 |
Common Stock | Additional Paid-In Capital | Retained (Deficit) Earnings | Accumulated Other Comprehensive Loss | Total Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||
Balance, July 25, 2015 | 163.2 | $ | 1.6 | $ | 669.8 | $ | 859.3 | $ | (12.6 | ) | $ | 1,518.1 | ||||||||||
Net loss | — | — | — | (11.9 | ) | — | (11.9 | ) | ||||||||||||||
Common stock issued in connection with the acquisition of ANN INC. | 31.2 | 0.3 | 344.6 | — | — | 344.9 | ||||||||||||||||
Total other comprehensive loss | — | — | — | — | (5.1 | ) | (5.1 | ) | ||||||||||||||
Shares issued and equity grants made pursuant to stock-based compensation plans | 1.9 | — | 35.9 | — | — | 35.9 | ||||||||||||||||
Purchases and retirements of common stock | (2.1 | ) | — | — | (18.6 | ) | — | (18.6 | ) | |||||||||||||
Balance, July 30, 2016 | 194.2 | 1.9 | 1,050.3 | 828.8 | (17.7 | ) | 1,863.3 | |||||||||||||||
Net loss | — | — | — | (1,067.3 | ) | — | (1,067.3 | ) | ||||||||||||||
Total other comprehensive income | — | — | — | — | 7.3 | 7.3 | ||||||||||||||||
Shares issued and equity grants made pursuant to stock-based compensation plans | 0.9 | 0.1 | 17.9 | — | — | 18.0 | ||||||||||||||||
Other | — | — | — | (0.3 | ) | — | (0.3 | ) | ||||||||||||||
Balance, July 29, 2017 | 195.1 | 2.0 | 1,068.2 | (238.8 | ) | (10.4 | ) | 821.0 | ||||||||||||||
Net loss | — | — | — | (39.7 | ) | — | (39.7 | ) | ||||||||||||||
Total other comprehensive loss | — | — | — | — | (2.5 | ) | (2.5 | ) | ||||||||||||||
Shares issued and equity grants made pursuant to stock-based compensation plans | 1.2 | — | 20.0 | — | — | 20.0 | ||||||||||||||||
Other | — | — | — | (0.3 | ) | — | (0.3 | ) | ||||||||||||||
Balance, August 4, 2018 | 196.3 | $ | 2.0 | $ | 1,088.2 | $ | (278.8 | ) | $ | (12.9 | ) | $ | 798.5 |
Buildings and improvements | 5-40 years |
Distribution center equipment and machinery | 3-20 years |
Leasehold improvements | Shorter of the useful life or expected term of the lease |
Furniture, fixtures, and equipment | 2-10 years |
Information technology | 2-10 years |
For the period from August 22, 2015 to July 30, 2016 | |||
(millions) | |||
Net sales | $ | 2,330.9 | |
Net loss | $ | (40.3 | ) |
Fiscal year ended July 30, 2016 | |||
(millions, except per share data) (unaudited) | |||
Pro forma net sales | $ | 7,119.1 | |
Pro forma net income | $ | 70.3 | |
Pro forma net income per common share: | |||
Basic | $ | 0.36 | |
Diluted | $ | 0.36 |
Premium Fashion (a) | Value Fashion (a) | Plus Fashion (b) | Kids Fashion | Total | ||||||||||||||||
(millions) | ||||||||||||||||||||
Balance at July 30, 2016 | $ | 733.9 | $ | 200.7 | $ | 175.3 | $ | 169.4 | $ | 1,279.3 | ||||||||||
Impairment losses | (428.9 | ) | (107.2 | ) | (60.2 | ) | — | (596.3 | ) | |||||||||||
Balance at July 29, 2017 | 305.0 | 93.5 | 115.1 | 169.4 | 683.0 | |||||||||||||||
Impairment losses | — | — | — | — | — | |||||||||||||||
Balance at August 4, 2018 | $ | 305.0 | $ | 93.5 | $ | 115.1 | $ | 169.4 | $ | 683.0 |
August 4, 2018 | July 29, 2017 | ||||||||||||||||||||||
Description | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||
Intangible assets subject to amortization (a): | (millions) | ||||||||||||||||||||||
Proprietary technology | $ | 5.3 | $ | (5.3 | ) | $ | — | $ | 5.3 | $ | (5.3 | ) | $ | — | |||||||||
Customer relationships | 54.2 | (41.9 | ) | 12.3 | 54.2 | (32.4 | ) | 21.8 | |||||||||||||||
Favorable leases | 38.2 | (21.3 | ) | 16.9 | 38.2 | (14.4 | ) | 23.8 | |||||||||||||||
Trade names | 5.3 | (5.3 | ) | — | 5.3 | (5.3 | ) | — | |||||||||||||||
Total intangible assets subject to amortization | 103.0 | (73.8 | ) | 29.2 | 103.0 | (57.4 | ) | 45.6 | |||||||||||||||
Intangible assets not subject to amortization: | |||||||||||||||||||||||
Brands and trade names (b) | 475.9 | — | 475.9 | 475.9 | — | 475.9 | |||||||||||||||||
Franchise rights | 10.9 | — | 10.9 | 10.9 | — | 10.9 | |||||||||||||||||
Total intangible assets not subject to amortization | 486.8 | — | 486.8 | 486.8 | — | 486.8 | |||||||||||||||||
Total intangible assets | $ | 589.8 | $ | (73.8 | ) | $ | 516.0 | $ | 589.8 | $ | (57.4 | ) | $ | 532.4 |
Expected Amortization | |||
(millions) | |||
2019 | $ | 7.0 | |
2020 | 5.3 | ||
Total | $ | 12.3 |
Fiscal Years Ended | |||||||
August 4, 2018 | July 29, 2017 | ||||||
Cash restructuring charges: | (millions) | ||||||
Severance and benefit costs (a) | $ | 5.2 | $ | 33.2 | |||
Lease termination and store closure costs | — | 1.3 | |||||
Other related charges (b) | 59.2 | 33.4 | |||||
Total cash charges | 64.4 | 67.9 | |||||
Non-cash charges: | |||||||
Impairment of store assets (c) | 14.1 | 14.0 | |||||
Total non-cash charges | 14.1 | 14.0 | |||||
Total restructuring and other related charges | $ | 78.5 | $ | 81.9 |
Severance and benefit costs | Lease termination and store closure costs | Other related charges | Total | ||||||||||||
(millions) | |||||||||||||||
Balance at July 30, 2016 | $ | — | $ | — | $ | — | $ | — | |||||||
Additions charged to expense | 33.2 | 1.3 | 33.4 | 67.9 | |||||||||||
Cash payments | (15.9 | ) | (1.3 | ) | (28.3 | ) | (45.5 | ) | |||||||
Balance at July 29, 2017 | 17.3 | — | 5.1 | 22.4 | |||||||||||
Additions charged to expense | 5.2 | — | 59.2 | 64.4 | |||||||||||
Cash payments | (18.4 | ) | — | (58.3 | ) | (76.7 | ) | ||||||||
Balance at August 4, 2018 | $ | 4.1 | $ | — | $ | 6.0 | $ | 10.1 |
August 4, 2018 | July 29, 2017 | |||||||
(millions) | ||||||||
Premium Fashion | $ | 212.2 | $ | 208.2 | ||||
Value Fashion | 153.9 | 180.6 | ||||||
Plus Fashion | 153.0 | 161.9 | ||||||
Kids Fashion | 103.8 | 88.6 | ||||||
Total inventories | $ | 622.9 | $ | 639.3 |
August 4, 2018 | July 29, 2017 | |||||||
(millions) | ||||||||
Property and Equipment: | ||||||||
Land | $ | 27.3 | $ | 31.1 | ||||
Buildings and improvements | 237.2 | 257.6 | ||||||
Leasehold improvements | 919.1 | 950.7 | ||||||
Furniture, fixtures and equipment | 785.3 | 791.4 | ||||||
Information technology | 831.8 | 708.0 | ||||||
Construction in progress | 29.2 | 54.3 | ||||||
2,829.9 | 2,793.1 | |||||||
Less: accumulated depreciation | (1,624.6 | ) | (1,355.5 | ) | ||||
Property and equipment, net | $ | 1,205.3 | $ | 1,437.6 |
Fiscal Years Ended | |||||||||||
August 4, 2018(a) | July 29, 2017 (a) | July 30, 2016 | |||||||||
(millions) | |||||||||||
Premium Fashion | $ | 2.3 | $ | 0.7 | $ | — | |||||
Value Fashion | 24.8 | 11.1 | 8.1 | ||||||||
Plus Fashion | 5.1 | 6.3 | 2.8 | ||||||||
Kids Fashion | 1.8 | 3.5 | 2.4 | ||||||||
Total impairment charges | $ | 34.0 | $ | 21.6 | $ | 13.3 |
August 4, 2018 | July 29, 2017 | |||||||
(millions) | ||||||||
Prepaid expenses (a) | $ | 145.9 | $ | 73.6 | ||||
Accounts and other receivables | 100.9 | 82.3 | ||||||
Short-term investments | 1.2 | 1.0 | ||||||
Other current assets | 0.5 | 0.5 | ||||||
Total prepaid expenses and other current assets | $ | 248.5 | $ | 157.4 |
August 4, 2018 | July 29, 2017 | |||||||
(millions) | ||||||||
Accrued salary, wages and related expenses | $ | 129.7 | $ | 147.4 | ||||
Accrued operating expenses | 147.6 | 151.4 | ||||||
Sales tax payable | 26.8 | 20.6 | ||||||
Other | 22.2 | 33.5 | ||||||
Total accrued expenses and other current liabilities | $ | 326.3 | $ | 352.9 |
August 4, 2018 | July 29, 2017 | ||||||
(millions) | |||||||
Revolving credit facility | $ | — | $ | — | |||
Less: unamortized debt issuance costs (a) | (4.3 | ) | (4.4 | ) | |||
(4.3 | ) | (4.4 | ) | ||||
Term loan | 1,371.5 | 1,596.5 | |||||
Less: unamortized original issue discount (b) | (18.0 | ) | (25.2 | ) | |||
unamortized debt issuance costs (b) | (20.5 | ) | (28.8 | ) | |||
1,333.0 | 1,542.5 | ||||||
Less: current portion | — | (44.0 | ) | ||||
Total long-term debt | $ | 1,328.7 | $ | 1,494.1 |
Fiscal Year | Amount | |||
(millions) | ||||
2019 | $ | — | ||
2020 | — | |||
2021 | 66.5 | |||
2022 | 90.0 | |||
2023 | 1,215.0 | |||
Total maturities | $ | 1,371.5 |
Level 1 | Quoted prices for identical instruments in active markets; |
Level 2 | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are recently traded (not active); and |
Level 3 | Instruments with little, if any, market activity are valued using significant unobservable inputs or valuation techniques. |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
(millions) | ||||||||||||
Domestic | $ | (115.1 | ) | $ | (1,451.0 | ) | $ | (56.0 | ) | |||
Foreign | 33.6 | 36.8 | 47.7 | |||||||||
Total loss before (benefit) provision for income taxes | $ | (81.5 | ) | $ | (1,414.2 | ) | $ | (8.3 | ) |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
Current: | (millions) | |||||||||||
Federal | $ | (1.3 | ) | $ | 6.9 | $ | 7.7 | |||||
State and local | 1.1 | 12.6 | 10.2 | |||||||||
Foreign | 5.5 | 4.9 | 12.5 | |||||||||
5.3 | 24.4 | 30.4 | ||||||||||
Deferred: | ||||||||||||
Federal | (79.5 | ) | (308.3 | ) | (21.7 | ) | ||||||
State and local | 32.0 | (64.8 | ) | (3.2 | ) | |||||||
Foreign | 0.4 | 1.8 | (1.9 | ) | ||||||||
(47.1 | ) | (371.3 | ) | (26.8 | ) | |||||||
Total (benefit) provision for income taxes | $ | (41.8 | ) | $ | (346.9 | ) | $ | 3.6 |
Benefit / (Expense) | ||||
(millions) | ||||
Reduction of U.S. federal corporate tax rate | $ | 28.3 | ||
Transition tax - federal | (24.6 | ) | ||
Transition tax - state impact | (0.7 | ) | ||
Executive compensation limitation | (1.3 | ) | ||
Reversal of DTL previously recorded on unremitted earnings | 46.8 | |||
Estimated Impact of Tax Reform | $ | 48.5 |
Fiscal Years Ended | |||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | |||||||||
(millions) | |||||||||||
Benefit for income taxes at the U.S. federal statutory rate (a) | $ | (21.9 | ) | $ | (495.0 | ) | $ | (2.9 | ) | ||
Increase (decrease) due to: | |||||||||||
State and local income taxes, net of federal benefit | 1.0 | (39.7 | ) | 2.4 | |||||||
Foreign rate differential | (1.7 | ) | — | — | |||||||
Tax Cuts and Job Act | (48.5 | ) | — | — | |||||||
State DTA valuation allowance | 21.8 | — | — | ||||||||
Share-based compensation (b) | 5.4 | — | — | ||||||||
Goodwill impairment | — | 184.3 | — | ||||||||
Net change relating to uncertain income tax benefits | (0.7 | ) | 3.2 | 3.3 | |||||||
Indefinitely reinvested foreign earnings | — | — | 0.1 | ||||||||
Other – net | 2.8 | 0.3 | 0.7 | ||||||||
Total (benefit) provision for income taxes | $ | (41.8 | ) | $ | (346.9 | ) | $ | 3.6 |
August 4, 2018 | July 29, 2017 | |||||||
Deferred tax assets (a): | (millions) | |||||||
Inventories | $ | 23.0 | $ | 35.6 | ||||
Net operating loss carryforwards and tax credits | 65.4 | 66.6 | ||||||
Accrued payroll and benefits | 45.4 | 83.1 | ||||||
Share-based compensation | 17.6 | 25.0 | ||||||
Straight-line rent | 46.2 | 62.2 | ||||||
Federal benefit of uncertain tax positions | 23.6 | 20.6 | ||||||
Gift cards and merchandise credits | 10.4 | 16.8 | ||||||
Other | 11.2 | 23.2 | ||||||
Total deferred tax assets | 242.8 | 333.1 | ||||||
Deferred tax liabilities: | ||||||||
Depreciation | 60.1 | 125.0 | ||||||
Amortization | 130.6 | 197.7 | ||||||
Foreign unremitted earnings | 0.4 | 47.1 | ||||||
Other | 23.5 | 21.7 | ||||||
Total deferred tax liabilities | 214.6 | 391.5 | ||||||
Valuation allowance | (54.3 | ) | (16.9 | ) | ||||
Net deferred tax liabilities | $ | (26.1 | ) | $ | (75.3 | ) |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
(millions) | ||||||||||||
Unrecognized tax benefit beginning balance | $ | 45.3 | $ | 43.2 | $ | 34.1 | ||||||
Additions related to the ANN Acquisition | — | — | 9.6 | |||||||||
Additions related to current period tax positions | — | 2.0 | 2.2 | |||||||||
Additions related to tax positions in prior years | 9.8 | 1.9 | 1.0 | |||||||||
Reductions related to prior period tax positions | (0.5 | ) | (0.2 | ) | (3.0 | ) | ||||||
Reductions related to settlements with taxing authorities | (1.3 | ) | (0.1 | ) | — | |||||||
Reductions related to expiration of statute of limitations | (2.4 | ) | (1.5 | ) | (0.7 | ) | ||||||
Unrecognized tax benefit ending balance | $ | 50.9 | $ | 45.3 | $ | 43.2 |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
(millions) | ||||||||||||
Accrued interest and penalties beginning balance | $ | 19.4 | $ | 17.2 | $ | 11.5 | ||||||
Additions related to the ANN Acquisition | — | — | 4.3 | |||||||||
Additions (reductions) charged to expense, net | 2.7 | 2.2 | 1.4 | |||||||||
Accrued interest and penalties ending balance | $ | 22.1 | $ | 19.4 | $ | 17.2 |
A summary of occupancy costs follows: | Fiscal Years Ended | |||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
(millions) | ||||||||||||
Base rentals | $ | 577.3 | $ | 611.1 | $ | 608.1 | ||||||
Percentage rentals | 33.2 | 27.4 | 33.7 | |||||||||
Other occupancy costs, primarily CAM and real estate taxes | 231.9 | 225.0 | 210.5 | |||||||||
Total | $ | 842.4 | $ | 863.5 | $ | 852.3 |
Fiscal Years | Minimum Operating Lease Payments (a) (b) | ||
(millions) | |||
2019 | $ | 554.4 | |
2020 | 482.1 | ||
2021 | 413.2 | ||
2022 | 336.7 | ||
2023 | 284.5 | ||
Thereafter | 661.0 | ||
Total future minimum rentals | $ | 2,731.9 |
Fiscal Years Ended | |||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | |||||||
(millions) | |||||||||
Basic | 196.0 | 194.8 | 192.2 | ||||||
Dilutive effect of stock options, restricted stock and restricted stock units (a) | — | — | — | ||||||
Diluted shares | 196.0 | 194.8 | 192.2 |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
(millions) | ||||||||||||
Compensation expense | $ | 19.8 | $ | 24.5 | $ | 26.2 | ||||||
Income tax benefit | $ | 5.3 | $ | 9.3 | $ | 10.1 |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
Expected term (years) | 5.1 | 5.1 | 5.1 | |||||||||
Expected volatility | 43.9 | % | 37.6 | % | 35.4 | % | ||||||
Risk-free interest rate | 2.0 | % | 1.3 | % | 1.5 | % | ||||||
Expected dividend yield | — | % | — | % | — | % | ||||||
Weighted-average grant date fair value | $ | 0.98 | $ | 1.87 | $ | 4.14 |
Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Terms | Aggregate Intrinsic Value (a) | ||||||||||
(thousands) | (years) | (millions) | |||||||||||
Options outstanding – July 29, 2017 | 16,413.7 | $ | 11.42 | 4.5 | $ | 0.2 | |||||||
Granted | 5,892.1 | 2.37 | |||||||||||
Exercised | — | — | |||||||||||
Canceled/Forfeited | (2,997.9 | ) | 9.36 | ||||||||||
Options outstanding – August 4, 2018 | 19,307.9 | $ | 8.97 | 4.2 | $ | 9.3 | |||||||
Options vested and expected to vest at August 4, 2018 (b) | 19,032.3 | $ | 9.05 | 4.3 | $ | 9.0 | |||||||
Options exercisable at August 4, 2018 | 9,995.9 | $ | 13.09 | 3.0 | $ | 0.1 |
(a) | The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. |
(b) | The number of options expected to vest takes into consideration estimated expected forfeitures. |
Service-based Restricted Equity Awards | ||||||
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||
(thousands) | ||||||
Nonvested at July 29, 2017 | 3,110.0 | $ | 8.05 | |||
Granted | 2,617.0 | 2.45 | ||||
Vested | (1,215.4 | ) | 8.27 | |||
Canceled/Forfeited | (340.3 | ) | 6.83 | |||
Nonvested at August 4, 2018 | 4,171.3 | $ | 4.57 |
• | Premium Fashion segment – consists primarily of the specialty retail, outlet and direct channel operations of the Ann Taylor and LOFT brands. |
• | Value Fashion segment – consists of the specialty retail, outlet and direct channel operations of the maurices and dressbarn brands. |
• | Plus Fashion segment – consists of the specialty retail, outlet and direct channel operations of the Lane Bryant and Catherines brands. |
• | Kids Fashion segment – consists of the specialty retail, outlet, direct channel and licensing operations of the Justice brand. |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
Net sales: | (millions) | |||||||||||
Premium Fashion (a) | $ | 2,317.8 | $ | 2,322.6 | $ | 2,330.9 | ||||||
Value Fashion | 1,820.5 | 1,950.2 | 2,094.6 | |||||||||
Plus Fashion | 1,340.0 | 1,353.9 | 1,463.6 | |||||||||
Kids Fashion | 1,100.0 | 1,023.1 | 1,106.3 | |||||||||
Total net sales | $ | 6,578.3 | $ | 6,649.8 | $ | 6,995.4 | ||||||
Operating income (loss): | ||||||||||||
Premium Fashion (a) (b) | $ | 135.2 | $ | 140.9 | $ | 13.3 | ||||||
Value Fashion | (83.2 | ) | 12.2 | 92.0 | ||||||||
Plus Fashion | 27.1 | 15.5 | 36.9 | |||||||||
Kids Fashion | 39.1 | (36.7 | ) | 29.0 | ||||||||
Unallocated acquisition and integration expenses | (5.4 | ) | (39.4 | ) | (77.4 | ) | ||||||
Unallocated restructuring and other related charges (c) | (78.5 | ) | (81.9 | ) | — | |||||||
Unallocated impairment of goodwill (Note 6) | — | (596.3 | ) | — | ||||||||
Unallocated impairment of intangible assets (Note 6) | — | (728.1 | ) | — | ||||||||
Total operating income (loss) | $ | 34.3 | $ | (1,313.8 | ) | $ | 93.8 |
(a) | The results of the Premium Fashion segment for the post-acquisition period from August 22, 2015 to July 30, 2016 are included within the Company's consolidated results of operations for Fiscal 2016. |
(b) | The results of the Premium Fashion segment for Fiscal 2016 include approximately $126.9 million of non-cash purchase accounting expense related to the amortization of the write-up of inventory to fair market value. |
Fiscal Years Ended | |||||||
August 4, 2018 | July 29, 2017 | ||||||
(millions) | |||||||
Cash related charges(1): | |||||||
Severance and benefit costs: | |||||||
Premium Fashion | $ | 1.3 | $ | 3.0 | |||
Value Fashion | (1.3 | ) | 8.2 | ||||
Plus Fashion | 3.2 | 10.6 | |||||
Kids Fashion | 0.2 | 2.4 | |||||
Corporate | 1.8 | 10.3 | |||||
Total Severance and benefit costs | 5.2 | 34.5 | |||||
Professional fees and other related charges: | |||||||
Plus Fashion | 2.2 | — | |||||
Corporate | 57.0 | 33.4 | |||||
Total Professional fees and other related charges | 59.2 | 33.4 | |||||
Total Cash related charges | 64.4 | 67.9 | |||||
Non-cash charges: | |||||||
Impairment of store assets: | |||||||
Premium Fashion | 6.5 | 3.2 | |||||
Value Fashion | 3.0 | 4.4 | |||||
Plus Fashion | 4.4 | 4.8 | |||||
Kids Fashion | 0.2 | 1.6 | |||||
Total Non-cash charges | 14.1 | 14.0 | |||||
Total restructuring and other related charges | $ | 78.5 | $ | 81.9 |
Fiscal Years Ended | ||||||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | ||||||||||
Depreciation and amortization expense: | (millions) | |||||||||||
Premium Fashion (a) | $ | 127.7 | $ | 134.2 | $ | 128.0 | ||||||
Value Fashion | 104.3 | 111.2 | 106.5 | |||||||||
Plus Fashion | 62.4 | 68.4 | 52.1 | |||||||||
Kids Fashion | 61.1 | 71.1 | 72.1 | |||||||||
Total depreciation and amortization expense | $ | 355.5 | $ | 384.9 | $ | 358.7 | ||||||
Capital expenditures (b): | ||||||||||||
Premium Fashion (a) | $ | 40.7 | $ | 64.2 | $ | 57.0 | ||||||
Value Fashion | 12.4 | 35.6 | 90.6 | |||||||||
Plus Fashion | 8.8 | 21.2 | 40.9 | |||||||||
Kids Fashion | 6.1 | 17.9 | 19.8 | |||||||||
Corporate (b) | 118.3 | 119.2 | 158.2 | |||||||||
Total capital expenditures | $ | 186.3 | $ | 258.1 | $ | 366.5 |
Fiscal Years Ended | |||||||||
August 4, 2018 | July 29, 2017 | July 30, 2016 | |||||||
Apparel | 84 | % | 85 | % | 87 | % | |||
Accessories and other | 16 | % | 15 | % | 13 | % | |||
Total net sales | 100 | % | 100 | % | 100 | % |
Fiscal Years Ended | ||||||||||||
Cash Interest and Taxes: | August 4, 2018 | July 29, 2017 | July 30, 2016 | |||||||||
(millions) | ||||||||||||
Cash paid for interest | $ | 112.9 | $ | 90.8 | $ | 76.3 | ||||||
Cash paid (received) for income taxes | $ | 5.1 | $ | 3.5 | $ | (9.2 | ) |
Fiscal Year Ended August 4, 2018 | Fourth Quarter (a) | Third Quarter (a) | Second Quarter (a)(b) | First Quarter (a)(b) | ||||||||||||
(millions, except per share data) | ||||||||||||||||
Net sales | $ | 1,766.3 | $ | 1,503.3 | $ | 1,719.0 | $ | 1,589.7 | ||||||||
Gross margin | 1,014.8 | 883.0 | 928.6 | 965.1 | ||||||||||||
Net income (loss) | 33.2 | (40.2 | ) | (39.3 | ) | 6.6 | ||||||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.17 | $ | (0.20 | ) | $ | (0.20 | ) | $ | 0.03 | ||||||
Diluted | $ | 0.17 | $ | (0.20 | ) | $ | (0.20 | ) | $ | 0.03 |
Fiscal Year Ended July 29, 2017 | Fourth Quarter (a)(b) | Third Quarter (a)(b)(c) | Second Quarter (a)(b) | First Quarter (a)(b) | ||||||||||||
(millions, except per share data) | ||||||||||||||||
Net sales | $ | 1,658.1 | $ | 1,565.1 | $ | 1,748.2 | $ | 1,678.4 | ||||||||
Gross margin | 951.4 | 948.4 | 945.8 | 1,014.0 | ||||||||||||
Net (loss) income | (15.8 | ) | (1,030.7 | ) | (35.2 | ) | 14.4 | |||||||||
Net (loss) income per common share: | ||||||||||||||||
Basic | $ | (0.08 | ) | $ | (5.29 | ) | $ | (0.18 | ) | $ | 0.07 | |||||
Diluted | $ | (0.08 | ) | $ | (5.29 | ) | $ | (0.18 | ) | $ | 0.07 |
State of Incorporation | ||
Subsidiaries of Ascena Retail Group, Inc. | or Formation | |
The Dress Barn, Inc. | Connecticut | |
Maurices Incorporated | Delaware | |
Tween Brands, Inc. d/b/a “Justice” | Delaware | |
Charming Shoppes, Inc. | Pennsylvania | |
GC Fulfillment, LLC | Delaware | |
Etna Retail DC, LLC | Delaware | |
Allynium Brand Solutions, LLC | Ohio | |
Ascena Trade Services, LLC | Delaware | |
ANN INC. | Delaware | |
Subsidiaries of The Dress Barn, Inc. | ||
DBX Inc. | New York | |
Dress Barn Credit Management, LLC | Virginia | |
933 Inspiration, LLC | Delaware | |
Subsidiaries of Maurices Incorporated | ||
Maurices Credit Management, Inc. | Virginia | |
Duluth Holdings, LLC | Minnesota | |
Duluth Real Estate, LLC | Delaware | |
ASNA Value Fashion LLC | Delaware | |
Subsidiaries of Tween Brands, Inc. | ||
Tween Brands Direct Services, Inc. | Ohio | |
Tween Brands Agency, Inc. | Ohio | |
Tween Brands Investment, LLC | Ohio | |
Tween Brands Marketing, Inc. | Ohio |
Too GC, LLC | Ohio | |
Tween Brands Service Co. | Ohio | |
Ascena Global Sourcing Hong Kong Limited | Hong Kong | |
Worldwide Retail Holdings, Inc. | Delaware | |
Worldwide Retail Holdings, B.V. | Netherlands | |
Worldwide Retail Holdings, Cooperatief UA | Netherlands | |
Tween Brands Canada Stores Ltd. | Ontario, Canada | |
Ascena Global Sourcing (Shanghai) Limited | Shanghai, China | |
Maurices Canada Stores, Ltd. | Ontario, Canada | |
Dress Barn Canada Stores, Ltd. | Ontario, Canada | |
Kirkstone Company Limited | Hong Kong | |
FSHC, LLC | Delaware | |
Trimoland Limited | Hong Kong | |
Yardarm Trading Limited | Hong Kong | |
Ascena Retail Sourcing India Private Limited | India | |
Subsidiaries of Charming Shoppes, Inc. | ||
Ascena Retail Holdings, Inc. | Ohio | |
C.S.F. Corp. | Delaware | |
Catalog Receivables LLC | Delaware | |
Catalog Seller LLC | Delaware | |
Catherines Stores Corporation | Tennessee | |
Catherines, Inc. | Delaware | |
Catherines #5124, Inc | Pennsylvania | |
Catherines #5147, Inc. | Florida | |
CCTM, Inc. | Delaware | |
Charming Shoppes of Delaware, Inc. | Pennsylvania | |
Charming Shoppes Receivables Corp. | Delaware | |
Charming Shoppes Seller, Inc. | Delaware |
Charming Shoppes Street, Inc. | Delaware | |
Chestnut Acquisition Sub, Inc. | Delaware | |
Crosstown Traders, Inc. | Delaware | |
CS Holdco II Inc. | Delaware | |
CSGC, Inc. | Ohio | |
Lane Bryant Charities, Inc. | Pennsylvania | |
CSI Industries, Inc. | Delaware | |
CSPE, LLC | Pennsylvania | |
Fashion Apparel Sourcing, LLC | Delaware | |
Fashion Service LLC | Delaware | |
Fashion Service Fulfillment Corporation | Delaware | |
Charming Sales Co. Two, Inc. | Wisconsin | |
Charming Sales Co. Four, Inc. | Wisconsin | |
Charming Sales Co. Three, Inc. | Wisconsin | |
Charming Sales Co. One, Inc. | Wisconsin | |
Lane Bryant #6243, Inc. | Florida | |
Lane Bryant Outlet 4106, Inc. | California | |
Lane Bryant of Pennsylvania, Inc. | Pennsylvania | |
Lane Bryant Purchasing Corp. | Ohio | |
Lane Bryant, Inc. | Delaware | |
PSTM, Inc. | Delaware | |
Sonsi, Inc. | Delaware | |
Spirit of America, Inc. | Delaware | |
Winks Lane, Inc. | Pennsylvania | |
Subsidiaries of ANN INC. | ||
AnnTaylor, Inc. | Delaware | |
Annco, Inc. | Delaware | |
AnnTaylor Retail, Inc. | Florida | |
ANN Cards Services, Inc. | Florida | |
AnnTaylor Distribution Services, Inc. | Delaware | |
ANN Canada Inc. | Canada (federal) | |
AnnTaylor Sourcing Far East Limited | Hong Kong | |
AnnTaylor of Puerto Rico, Inc. | Puerto Rico | |
AnnTaylor Trading (Shanghai) Co., Ltd. | Shanghai, China |
Date: September 24, 2018 | |
/s/ David Jaffe | |
David Jaffe | |
Chief Executive Officer |
Date: September 24, 2018 | |
/s/ Robb Giammatteo | |
Robb Giammatteo | |
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ David Jaffe | |
David Jaffe | |
Chief Executive Officer | |
September 24, 2018 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Robb Giammatteo | |
Robb Giammatteo | |
Executive Vice President and Chief Financial Officer | |
September 24, 2018 |
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Document And Entity Information - USD ($) $ in Billions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Sep. 20, 2018 |
Jan. 26, 2018 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Aug. 04, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Trading Symbol | asna | ||
Entity Registrant Name | Ascena Retail Group, Inc. | ||
Entity Central Index Key | 0001498301 | ||
Current Fiscal Year End Date | --08-04 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 196,374,376 | ||
Entity Public Float | $ 0.4 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions |
Aug. 04, 2018 |
Jul. 29, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | |
Common stock, issued (shares) | 195.1 | |
Common stock, outstanding (shares) | 195.1 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|||
Income Statement [Abstract] | |||||
Net sales | $ 6,578.3 | $ 6,649.8 | $ 6,995.4 | ||
Cost of goods sold | (2,786.8) | (2,790.2) | (3,066.7) | ||
Gross margin | 3,791.5 | 3,859.6 | 3,928.7 | ||
Other operating expenses: | |||||
Buying, distribution, and occupancy costs | (1,281.1) | (1,274.3) | (1,286.5) | ||
Selling, general and administrative expenses | (2,036.7) | (2,068.5) | (2,112.3) | ||
Acquisition and integration expenses | (5.4) | (39.4) | (77.4) | ||
Restructuring Charges | [1] | (78.5) | (81.9) | 0.0 | |
Impairment of goodwill | 0.0 | (596.3) | 0.0 | ||
Impairment of intangible assets | 0.0 | (728.1) | 0.0 | ||
Depreciation and amortization expense | (355.5) | (384.9) | (358.7) | ||
Total other operating expenses | (3,757.2) | (5,173.4) | (3,834.9) | ||
Operating income (loss) | 34.3 | (1,313.8) | 93.8 | ||
Interest expense | (113.0) | (102.2) | (103.3) | ||
Interest and other income, net | 2.2 | 1.8 | 0.4 | ||
(Loss) Gain on extinguishment of debt | (5.0) | 0.0 | 0.8 | ||
Loss before benefit (provision) for income taxes | (81.5) | (1,414.2) | (8.3) | ||
Benefit (provision) for income taxes | 41.8 | 346.9 | (3.6) | ||
Net loss | $ (39.7) | $ (1,067.3) | $ (11.9) | ||
Net loss per common share: | |||||
Basic | $ (0.20) | $ (5.48) | $ (0.06) | ||
Diluted | $ (0.20) | $ (5.48) | $ (0.06) | ||
Weighted average common shares outstanding: | |||||
Basic (in shares) | 196.0 | 194.8 | 192.2 | ||
Diluted (in shares) | 196.0 | 194.8 | 192.2 | ||
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (39.7) | $ (1,067.3) | $ (11.9) |
Other comprehensive (loss) income, net of tax: | |||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | 0.0 | (0.7) | (3.8) |
Foreign currency translation adjustment | (2.5) | 3.5 | (1.3) |
Total Other Comprehensive (loss) income before reclassification | (2.5) | 2.8 | (5.1) |
Reclassification of settlement charges for ANN's pension plan, net of income tax benefit | 0.0 | 4.5 | 0.0 |
Total comprehensive loss | $ (42.2) | $ (1,060.0) | $ (17.0) |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) $ in Millions |
12 Months Ended |
---|---|
Jul. 29, 2017
USD ($)
| |
Statement of Comprehensive Income [Abstract] | |
Net actuarial loss on a defined benefit pension plan, tax | $ 0.4 |
Reclassification for settlement of ANN's pension plan, tax benefit | $ 2.9 |
Description of Business |
12 Months Ended |
---|---|
Aug. 04, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Ascena Retail Group, Inc., a Delaware corporation, is a leading national specialty retailer of apparel for women and tween girls. The Company's operations consist of its direct channel operations and approximately 4,600 stores throughout the United States, Canada and Puerto Rico. The Company had annual revenues for the fiscal year ended August 4, 2018 of approximately $6.6 billion. The Company and its subsidiaries are collectively referred to herein as the “Company,” “ascena,” “we,” “us,” “our” and “ourselves,” unless the context indicates otherwise. The Company operates its business in four operating segments: Premium Fashion, Value Fashion, Plus Fashion and Kids Fashion. All of our segments sell fashion merchandise to the women's and girls' apparel market across a wide range of ages, sizes and demographics. Our segments consist of specialty retail, outlet and direct channel as well as licensed franchises in international territories at our Kids Fashion segment. Our Premium Fashion segment consists of our Ann Taylor and LOFT brands; our Value Fashion segment consists of our maurices and dressbarn brands; our Plus Fashion segment consists of our Lane Bryant and Catherines brands; and our Kids Fashion segment consists of our Justice brand. The Company's brands had the following store counts as of August 4, 2018: Ann Taylor 304 stores; LOFT 672 stores; maurices 972 stores; dressbarn 730 stores; Lane Bryant 749 stores; Catherines 348 stores; and Justice 847 stores. |
Basis of Presentation |
12 Months Ended |
---|---|
Aug. 04, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Consolidation The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and present the financial position, operational results, comprehensive loss and cash flows of entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include: evaluation of goodwill and other intangible assets for impairment; the realizability of inventory; impairments of long-lived tangible assets; and the realizability of deferred tax assets. Fiscal Year Fiscal year 2018 ended on August 4, 2018 and reflected a 53-week period (“Fiscal 2018") as the Company conformed its fiscal periods to the National Retail Federation calendar; fiscal year 2017 ended on July 29, 2017 and reflected a 52-week period (“Fiscal 2017"); and fiscal year 2016 ended on July 30, 2016 and reflected a 53-week period (“Fiscal 2016”). All references to “Fiscal 2019” reflect a 52-week period that will end on August 3, 2019. The Company's Premium Fashion segment, which historically has followed the National Retail Federation calendar, recognized an additional week during the second quarter of Fiscal 2018, consistent with other retail companies already on that calendar. The Company's Value Fashion, Plus Fashion, and Kids Fashion segments recognized the 53rd week in the fourth quarter of Fiscal 2018 due to reporting systems constraints. The results of ANN, or our Premium Fashion segment, for the post-acquisition period from August 22, 2015 to July 30, 2016, have been included in the Company's consolidated statements of operations for Fiscal 2016. |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 04, 2018 | |||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Revenue Recognition Revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred, price has been fixed or is determinable and collectability is reasonably assured. Retail store revenue is recognized net of estimated returns at the time of sale to consumers. Direct channel revenue from sales of products ordered through the Company’s retail internet sites are recognized upon delivery and receipt of the shipment by our customers. Such revenue is reduced by an estimate of returns. Reserves for estimated product returns are recorded based on historical return trends and are adjusted for known events, as applicable. Reserves for estimated product returns were $19.9 million and $18.1 million as of August 4, 2018 and July 29, 2017, respectively. Gift cards, gift certificates and merchandise credits (collectively, “gift cards”) issued by the Company are recorded as a deferred income liability until they are redeemed, at which point revenue is recognized. Gift cards do not have expiration dates. The Company recognizes income for unredeemed gift cards when the likelihood of a gift card being redeemed by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recognized in Net sales over time based on the historical redemption patterns and historically has not been material. Revenue associated with merchandise shipments to other third-party retailers is recognized at the time title passes and risk of loss is transferred to customers, which generally occurs at the date of shipment. In addition to retail-store, direct channel and third-party sales, the Company's segments recognize revenue from (i) licensing arrangements with franchised stores, (ii) royalty payments received under license agreements for the use of their trade name and (iii) credit card agreements as it is earned in accordance with the terms of the underlying agreements. The Company accounts for sales and other related taxes on a net basis, thereby excluding such taxes from revenue. Cost of Goods Sold Cost of goods sold (“COGS”) consists of all costs of merchandise (net of purchase discounts and vendor allowances), merchandise acquisition costs (primarily commissions and import fees) and freight to our distribution centers and stores. These costs are determined to be directly or indirectly incurred in bringing an article to its existing condition and location. Additionally, the direct costs associated with shipping goods to customers and adjustments to the carrying value of inventory related to realizability and shrinkage are recorded as components of COGS. Our COGS and Gross margin may not be comparable to those of other entities. Some entities, like us, exclude costs related to their distribution network, buying function, store occupancy costs and depreciation and amortization expenses from COGS and include them in other operating expenses, whereas other entities include these costs in their COGS. Buying, Distribution and Occupancy Expenses Buying, distribution and occupancy expenses ("BD&O expenses") consist of store occupancy and utility costs, fulfillment expense (as defined below) and all costs associated with the buying and distribution functions (excluding depreciation). Selling, General and Administrative Expenses Selling, general and administrative expenses (“SG&A expenses”) consist of compensation and benefit-related costs for sales and store operations personnel, administrative personnel and other employees not associated with the functions described above under BD&O expenses. SG&A expenses also include advertising and marketing costs, information technology and communication costs, supplies for our stores and administrative facilities, insurance costs, legal costs and costs related to other administrative services. Acquisition and Integration Expenses Acquisition and integration expenses consist primarily of transaction expenses representing legal, consulting and investment banking-related costs that are direct, incremental costs incurred prior to the closing of an acquisition, costs to integrate the operations of acquired businesses into the Company's existing infrastructure and severance and retention-related expenses from integrating acquired businesses. Restructuring and Other Related Charges Restructuring and other related charges consist of severance and benefit costs, long-lived asset impairment charges and professional fees incurred in connection with identification and implementation of the initiatives associated with the Change for Growth program, as more fully described in Note 7. Shipping and Fulfillment Shipping and fulfillment fees billed to customers are recorded as revenue. The direct costs associated with shipping goods to customers are recorded as a component of COGS. Costs associated with preparing the merchandise for shipping, such as picking, packing, warehousing and order charges ("fulfillment expense") are recorded as a component of BD&O expenses. Fulfillment expense was approximately $53.4 million in Fiscal 2018, $41.0 million in Fiscal 2017 and $50.5 million in Fiscal 2016. Marketing and Advertising Costs Marketing and advertising costs are included in SG&A expenses. Marketing and advertising costs are expensed when the advertisement is first exhibited. Marketing and advertising expenses were $265.1 million for Fiscal 2018, $269.1 million for Fiscal 2017 and $270.6 million for Fiscal 2016. Deferred marketing and advertising costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were not material at the end of either Fiscal 2018, Fiscal 2017 or Fiscal 2016. Foreign Currency Translation and Transactions The operating results and financial position of foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. The resulting translation gains or losses are included in the consolidated statements of comprehensive loss, and in the consolidated statements of equity as a component of accumulated other comprehensive loss (“AOCI”). Gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature also are included within AOCI. The Company recognizes gains and losses on transactions that are denominated in a currency other than the respective entity's functional currency. Foreign currency transaction gains and losses also result from intercompany loans made to foreign subsidiaries that are not of a long-term investment nature and include amounts realized on the settlement of certain intercompany loans with foreign subsidiaries. Net losses (gains) from foreign currency transactions were $1.1 million in Fiscal 2018, $(0.4) million in Fiscal 2017 and $1.5 million in Fiscal 2016. Such amounts are recognized in earnings and included within Interest income and other income, net in the accompanying consolidated statements of operations. Stock-Based Compensation The Company expenses stock-based compensation to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. The Company uses the Black-Scholes valuation method to determine the grant date fair value of its option-based compensation. Shares of restricted stock and restricted stock units are issuable with service-based, market-based or performance-based conditions (collectively, “Restricted Equity Awards”). Compensation expense for Restricted Equity Awards is recognized over the vesting period based on the grant-date fair values of the awards that are expected to vest based upon the service, market and performance-based conditions. Long-Term Incentive Plans The Company maintains a long-term cash incentive program ("LTIP") which entitles the holder to a cash payment equal to a target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over a one or three-year performance period. Compensation expense for the LTIP is recognized over the related performance periods based on the expected achievement of the performance goals. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less and receivables from financial institutions related to credit card purchases due to the high-credit quality and short time frame for settlement of the outstanding amounts. Concentration of Credit Risk The Company maintains cash deposits and cash equivalents with well-known and stable financial institutions; however, there were significant amounts of cash and cash equivalents on deposit at overseas financial institutions as well as at financial institutions that were in excess of FDIC-insured limits at August 4, 2018. Inventories Retail Inventory Method We hold inventory for sale through our retail stores and direct channel sites. All of the Company's segments, other than our Premium Fashion segment discussed below, use the retail inventory method of accounting, under which inventory is stated at the lower of cost, on a First In, First Out (“FIFO”) basis, or market. Under the retail inventory method, the valuation of inventory at cost and the resulting gross margin are calculated by applying a calculated cost to retail ratio to the retail value of inventory. Inherent in the retail method are certain significant management judgments and estimates including, among others, initial merchandise markup, markdowns and shrinkage, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to a number of quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and mix of products in inventory, as well as changes in consumer preferences, market and economic conditions. The Company’s historical estimates of these costs and its markdown provisions have not differed materially from actual results. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. Weighted-average Cost Method Our Premium Fashion segment uses the weighted-average cost method to value inventory, under which inventory is valued at the lower of average cost or market, at the individual item level. Inventory cost is adjusted when the current selling price or future estimated selling price is less than cost. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. Property and Equipment, Net Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives:
Certain costs associated with computer software developed or obtained for internal use are capitalized, including internal costs. The Company capitalizes certain costs for employees that are directly associated with internal use computer software projects once specific criteria are met. Costs are expensed for preliminary stage activities, training, maintenance and all other post-implementation stage activities as they are incurred. Property and equipment, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. In evaluating long-lived assets for recoverability, including finite-lived intangible assets as described below, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan of disposal are reported at the lower of carrying value or fair value less costs to sell. Goodwill and Other Intangible Assets, Net At acquisition, the Company estimates and records the fair value of purchased intangible assets, which primarily consist of certain trade names, customer relationships, favorable leases, proprietary software and franchise rights. The fair value of these intangible assets is estimated based on management's assessment, considering independent third-party appraisals, when necessary. The excess of the purchase consideration over the fair value of net assets acquired is recorded as goodwill. Goodwill and certain other intangible assets deemed to have indefinite useful lives, including trade names and certain franchise rights, are not amortized but assessed for impairment annually or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable. Such assessment is performed using a quantitative approach at the reporting unit level. The reporting units identified for the purpose of the goodwill impairment assessment for all periods presented are ANN, maurices, dressbarn, Lane Bryant, Catherines and Justice, each of which represents the lowest level where discrete financial information is available and is regularly reviewed by segment managers. For Fiscal 2016, the annual impairment assessment was performed as of the first day of the fourth quarter and was determined using a two-step process. The first step of the goodwill impairment test was to identify potential impairment by comparing the fair value of a reporting unit with its net book value (or carrying amount), including goodwill. If the fair value of a reporting unit exceeded its carrying amount, goodwill of the reporting unit was considered not to be impaired and performance of the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeded its fair value, the second step of the goodwill impairment test was performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compared the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeded the implied fair value of that goodwill, an impairment loss was recognized in an amount equal to that excess. The implied fair value of goodwill was determined in the same manner as the amount of goodwill recognized in a business combination. The fair value of the reporting unit was then allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value was the purchase price paid to acquire the reporting unit. In Fiscal 2017, the Company adopted Accounting Standards Update ("ASU") 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes Step 2 of the goodwill impairment test requiring a hypothetical purchase price allocation. Under the new guidance, the Company evaluates assets for potential impairment, and then determines goodwill impairment by comparing the reporting unit's fair value to its carrying value. A goodwill impairment loss is recognized in an amount equal to the excess of the reporting unit's carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. This approach was also utilized for Fiscal 2018. The impairment test for other indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value. The fair value of indefinite-lived intangible assets is primarily determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to the excess. In addition, in evaluating finite-lived intangible assets for recoverability, we use our best estimate of future cash flows expected to result from the use of the asset and eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value. Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets (as discussed above), are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. Refer to the Company's accounting policy for long-lived asset impairment as described earlier under the caption "Property and Equipment, Net." Insurance Reserves The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers’ compensation, general liability and employee healthcare benefits. Liabilities associated with these risks are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Such liabilities are capped through the use of stop-loss contracts with insurance companies. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. As of August 4, 2018 and July 29, 2017, these reserves were $69.2 million and $73.1 million, respectively. The Company is subject to various claims and contingencies related to insurance and other matters arising out of the normal course of business. The Company is self-insured for expenses related to its employee medical and dental plans, its workers’ compensation plan and its general liability plan, up to certain thresholds. Claims filed, as well as claims incurred but not reported, are accrued based on management’s estimates, using information received from plan administrators, historical analysis and other relevant data. The Company’s stop-loss insurance coverage limit for individual claims under these policies is $750,000 for medical claims, $500,000 for workers' compensation claims and $150,000 for general liability claims. The Company believes its accruals for claims and contingencies are adequate based on information currently available. However, it is possible that actual results could differ significantly from the recorded accruals for claims and contingencies. Income Taxes Income taxes are provided using the asset and liability method. Under this method, income taxes (i.e., deferred tax assets and liabilities, current taxes payable/refunds receivable and tax expense) are recorded based on amounts refundable or payable in the current year, and include the results of any differences between U.S. GAAP and tax reporting. Deferred income taxes reflect the tax effect of net operating loss, capital loss and general business credit carry forwards and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The Company accounts for the financial effect of changes in tax laws or rates in the period of enactment. Valuation allowances are established when management determines that it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Tax valuation allowances are analyzed periodically and adjusted as events occur, or circumstances change, that warrant adjustments to those balances. In determining the income tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more-likely-than-not of being sustained upon audit, based solely on the technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. These assessments can be complex and the Company often obtains assistance from external advisors. To the extent that the Company’s estimates change or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. If the initial assessment fails to result in the recognition of a tax benefit, the Company regularly monitors its position and subsequently recognizes the tax benefit if (i) there are changes in tax law or analogous case law that sufficiently raise the likelihood of prevailing on the technical merits of the position to more-likely-than-not, (ii) the statute of limitation expires or (iii) there is a completion of an audit resulting in a settlement of that tax year with the appropriate agency. Uncertain tax positions are classified as current only when the Company expects to pay cash within the next twelve months. Interest and penalties, if any, are recorded within the benefit (provision) for income taxes in the Company’s accompanying consolidated statements of operations and are classified on the accompanying consolidated balance sheets with the related liability for uncertain tax positions. Leases The Company leases certain facilities and equipment, including its retail stores. Most of the Company's leases contain renewal options, rent escalation clauses and/or landlord incentives. Rent expense for non-cancelable operating leases with scheduled rent increases and/or landlord incentives is recognized on a straight-line basis over the lease term, beginning with the effective lease commencement date. The effective lease commencement date represents the date on which the Company takes possession of, or controls the physical use of, the leased property. The excess of straight-line rent expense over scheduled payment amounts and landlord incentives is recorded as a deferred rent liability and is classified on the consolidated balance sheets within Lease-related liabilities. Certain leases provide for contingent rents, which are determined as a percentage of gross sales in excess of specified levels. A contingent rent liability is recognized together with the corresponding rent expense when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. |
Recently Issued Accounting Standards |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recently adopted standards In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification in the statement of cash flows. The new standard requires excess tax benefits and shortfalls to be recorded within the provision for income taxes in the consolidated statements of operations in the period they are realized. The impact of this change depends on changes in the Company's stock price and the timing of the exercise of stock options and the vesting of restricted stock units, so the full effect of the standard is not able to be quantified. However, the recognition of these changes within the consolidated statements of operations will likely result in increased volatility of our provision for income taxes and earnings. The Company adopted the guidance on a prospective basis in the first quarter of Fiscal 2018, and has recognized additional non-cash income tax expense of approximately $5.4 million in Fiscal 2018. Finally, in connection with the new standard, the Company has elected to maintain its practice of estimating forfeitures when recognizing expense for share-based payment awards rather than accounting for forfeitures when they occur. The other amendments of the standard are not expected to have a material impact on the Company's consolidated financial statements. Recently issued standards Revenue Recognition In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in FASB Accounting Standards Codification, "Revenue Recognition (Topic 605)." The guidance requires that an entity recognize revenue in a way that depicts the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. The guidance is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein, and will be adopted by the Company in Fiscal 2019. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company has determined that it will apply the new guidance using the modified retrospective basis. The Company has substantially completed its evaluation of the impact that adopting ASU 2014-09 will have on its consolidated financial statements and notes thereto. Based on these efforts, the Company currently anticipates that the performance obligations underlying its core revenue streams (its retail store and direct channel businesses) and related timing of revenue recognition thereof, will remain substantially unchanged. However, the new standard changes the accounting for certain of its customer loyalty and credit card programs. Under the new standard, the Company will account for its customer loyalty programs using a deferred revenue model which will defer revenue at the estimated fair value as the loyalty points are earned, as opposed to recording an expense in Cost of goods sold, and then recognize the revenue when the loyalty points are redeemed. Additionally, the Company will account for finance charges and other income under its credit card programs as variability is resolved. As a result, the Company currently expects to record a cumulative adjustment to opening retained earnings in Fiscal 2019 of approximately $5 million. Beginning in Fiscal 2019, the new standard requires the Company to make immaterial financial statement presentation changes related to its customer loyalty program and sales return reserve on a prospective basis. The adoption of this ASU will also result in enhanced footnote disclosure requirements during the first quarter of Fiscal 2019 including certain balance sheet activity and unsatisfied performance obligations related to certain promotional programs, primarily gift cards. Leases In February 2016, the FASB issued ASU 2016-02, "Leases." The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company is currently evaluating which transition method it will use to adopt the new guidance. The Company does not expect that the guidance will have a significant impact on its consolidated statements of cash flows and is currently evaluating the guidance and its impact on its other consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and short-term and long-term liabilities. The Company is also in the process of testing its lease administration system and is identifying changes to its business processes and controls to support adoption of the new standard in Fiscal 2020. |
Acquisition of ANN INC. |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of ANN INC. | Acquisition of ANN INC. On August 21, 2015, the Company acquired 100% of the outstanding common stock of ANN for an aggregate purchase price of approximately $2.1 billion. The purchase price consisted of approximately $1.75 billion in cash and the issuance of 31.2 million shares of the Company's common stock valued at approximately $345 million, based on the Company's stock price on the date of the acquisition. The cash portion of the purchase price was funded with borrowings under a $1.8 billion seven-year, variable-rate term loan described in Note 12. In connection with the acquisition, the Company expensed $20.8 million of transaction costs during Fiscal 2016 which are included within Acquisition and integration expenses in the Company’s accompanying consolidated statements of operations. In addition, the Company expensed $126.9 million during Fiscal 2016 related to the amortization of the write-up of ANN's inventory to its fair value which is included within Cost of goods sold in the consolidated statements of operations. The results of ANN for the post-acquisition period from August 22, 2015 to July 30, 2016 included in the Company’s accompanying consolidated statement of operations for Fiscal 2016 consist of the following:
The following pro forma information has been prepared as if the ANN Acquisition and the issuance of stock and debt to finance the acquisition had occurred as of the beginning of Fiscal 2015:
The pro forma amounts reflect the historical operational results for ascena as well as those of ANN for the three-week stub period preceding the close of the transaction on August 21, 2015. The pro forma amounts also reflect the effect of pro forma adjustments of $82.2 million, net of taxes. The adjustments primarily reflect transaction costs and the amortization of the fair value adjustment to inventory, which are currently included in the reported results and are excluded from the Fiscal 2016 pro forma amounts due to their non-recurring nature. The pro forma weighted-average number of common shares outstanding for each period assumes that 31.2 million shares of ascena common stock issued in connection with the acquisition had been issued as of the beginning of Fiscal 2015. The pro forma weighted-average number of diluted shares outstanding for Fiscal 2016 includes potentially dilutive shares of 1.2 million, which are excluded from the reported amount due to the net loss reported for the year. The pro forma financial information is not indicative of the operational results that would have been obtained had the transactions actually occurred as of that date, nor is it necessarily indicative of the Company’s future operational results. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following details the changes in goodwill for each reportable segment:
(a) The impairment loss for Fiscal 2017 represents the accumulated impairment loss at the ANN reporting unit and the maurices reporting unit as of August 4, 2018 and July 29, 2017. (b) The impairment loss for Fiscal 2017 represents impairment charges at the Lane Bryant reporting unit. The accumulated impairment loss at the Lane Bryant reporting unit was $321.9 million as of August 4, 2018 and July 29, 2017. Other Intangible Assets Other intangible assets consist of the following:
________ (a) There were no finite-lived intangible asset impairment losses recorded for any of the periods presented. (b) The Company recorded impairment charges related to trade names during Fiscal 2017, as discussed below. Amortization The Company recognized amortization expense on finite-lived intangible assets, excluding favorable leases discussed below, of $9.5 million in Fiscal 2018, $12.5 million in Fiscal 2017 and $17.2 million in Fiscal 2016, which is classified within Depreciation and amortization expense in the accompanying consolidated statements of operations. The Company amortizes customer relationships recognized as part of the ANN Acquisition over five years based on the pattern of revenue expected to be generated from the use of the asset. The expected amortization of customer relationships is as follows:
Favorable leases are amortized into either Buying, distribution and occupancy expenses or Selling, general and administrative expenses over a weighted-average lease term of approximately four years. The Company recognized amortization expense on favorable leases of $6.9 million in Fiscal 2018 and $7.3 million in Fiscal 2017. The expected amortization for each of the next five fiscal years is as follows: Fiscal 2019: $6.4 million; Fiscal 2020: $5.6 million; Fiscal 2021: $2.4 million; Fiscal 2022: $1.6 million; and Fiscal 2023 and thereafter: $0.9 million. Goodwill and Other Indefinite-lived Intangible Assets Impairment Assessment As discussed in Note 3, the Company performs its annual impairment assessment of goodwill and indefinite-lived intangible assets during the fourth quarter of each fiscal year. The impairment test for other indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to the excess. Based on the results of the Company’s annual impairment testing of goodwill and indefinite-lived intangible assets for Fiscal 2018, no impairment charges were deemed necessary. Fiscal 2017 Interim Impairment Assessment The third quarter of Fiscal 2017 marked the continuation of the challenging market environment in which the Company competes. Lower than expected comparable sales for the third quarter, along with a reduced comparable sales outlook for the fourth quarter led the Company to significantly reduce its level of forecasted earnings for Fiscal 2017 and future periods. The Company concluded that these factors, as well as the decline in the Company's stock price, represented impairment indicators which required the Company to test its goodwill and indefinite-lived intangible assets for impairment during the third quarter of Fiscal 2017 (the "Interim Test"). As a result, the Company performed an Interim Test of goodwill and indefinite-lived intangible assets using a quantitative approach on the last day of its third fiscal quarter. The Interim Test was determined with the assistance of an independent valuation firm using two valuation approaches, including the income approach (the discounted cash flow method) and the market approach (guideline public company method). The Company believes that the income approach (Level 3 measurement) is the most reliable indication of value as it captures forecasted revenues and earnings for the reporting units in the projection period that the market approach may not directly incorporate. Therefore, a greater weighting was applied to the income approach than the market approach. The weighing of the fair values by valuation approach (income approach vs. market approach) was consistent across all reporting units. For all reporting units, the income approach was weighted 85% and the market approach 15%. Under the market approach, the Company estimated a fair value based on comparable companies' market multiples of revenues and earnings before interest, taxes, depreciation and amortization, factored in a control premium, and used the market approach as a comparison of respective fair values. The estimated fair value determined under the market approach validated its estimate of fair value determined under the income approach. Finally, the Company’s publicly traded market capitalization was reconciled to the sum of the fair value of the reporting units, taking into account subsequent changes in the Company's stock price reflecting information known as of, but made public subsequent to, the date of the Interim Test. The projections used in the Interim Test reflect lower assumptions across certain key areas as a result of lower-than-expected performance and a sustained challenging retail environment. In particular, sales growth assumptions were significantly lowered to reflect the shortfall in actual results versus those previously projected, reflecting the uncertainty of future comparable sales given the sector's dynamic change. The lower sales outlook resulted in a significant reduction in fair market value compared to the prior valuation performed in Fiscal 2016. Based on the results of the impairment assessment, the fair value of its Catherines reporting unit substantially exceeded its carrying value and was not at risk of impairment, while its Justice reporting unit only exceeded its carrying value by 8%. The changes in key assumptions and the resulting reduction in the long-term growth rates and profitability included in the Interim Test resulted in a decrease in the fair values of trade names and goodwill at its ANN, maurices and Lane Bryant reporting units such that their fair values were less than their carrying values. As a result, the Company recognized impairment losses to write down the carrying values of its trade name intangible assets to their fair values as follows: $210.0 million of its Ann Taylor trade name, $356.3 million of its LOFT trade name and $161.8 million of its Lane Bryant trade name. The fair value of the trade names was determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name (Level 3 measurement). In addition, the Company recognized the following goodwill impairment charges: a loss of $428.9 million at the ANN reporting unit, $107.2 million at the maurices reporting unit and $60.2 million at the Lane Bryant reporting unit to write down the carrying values of the reporting units to their fair values. These impairment losses have been disclosed separately on the face of the accompanying consolidated statements of operations. |
Restructuring and Other Related Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | Restructuring and Other Related Charges In Fiscal 2017, the Company announced that it was beginning a multi-year transformation plan with the objective of supporting sustainable long-term growth and increasing shareholder value (the "Change for Growth" program). In Fiscal 2017, the Company (i) refined its operating model to increase the focus on key customer segments, (ii) developed initiatives which will optimize the flow of product through the Company's distribution channels, including direct channel and its brick-and-mortar retail locations, (iii) consolidated certain support functions into its brand services group, including Human Resources, Real Estate, Non-Merchandise Procurement, and Asset Protection, and (iv) began a review of its store fleet with the goal of reducing the number of under-performing stores through either rent reductions or store closures, in an effort to increase the overall profitability of the remaining store portfolio and convert sales from these stores into direct channel sales or to nearby store locations. In Fiscal 2018, in addition to continuing a number of the activities started in Fiscal 2017, the Company (i) began to develop new capabilities such as markdown optimization, size pack optimization and localized inventory planning with the goal of allowing it to better compete in the shifting retail landscape, (ii) enhanced our capability to analyze transaction data to support strategic decisions, and (iii) transitioned certain transaction processing functions within the brand services group to an independent third-party managed-service provider. Other activities during Fiscal 2018 included the ongoing fleet optimization store program, as the Company continues to renegotiate leases and close stores. Such activities included the planned closure of under-performing stores and the completion of the previously announced relocation of the Catherines brand to Columbus, Ohio, which resulted in a write down of their former headquarters building in Bensalem, Pennsylvania to fair market value during Fiscal 2018. The building was sold in the third quarter of Fiscal 2018. These previously mentioned charges were recorded within Restructuring and other related charges. Actions associated with the Change for Growth program are currently expected to continue through Fiscal 2019. As the Company executes on these initiatives during Fiscal 2019, we currently expect to incur charges during Fiscal 2019 of approximately $20 million for professional fees and have identified capital projects of approximately $30 million to be incurred during Fiscal 2019. As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges:
_______ (a) Severance and benefit costs reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. (b) Other related charges consist of professional fees and other related charges consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program, as well as third-party costs associated with the relocation of the Catherines brand to Ohio in Fiscal 2018. (c) Non cash asset impairments primarily reflect decisions within the Company's fleet optimization program to close certain under-performing stores as well as write-downs associated with a Plus Fashion segment building to fair market value. The amount for Fiscal 2018 includes asset impairments of $15.2 million and was offset by the write-off of $1.1 million of tenant allowances. A summary of activity for Fiscal 2017 and Fiscal 2018 in the restructuring-related liabilities associated with the Change for Growth program, which is included within Accrued expenses and other current liabilities, is as follows:
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Inventories | Inventories Inventories substantially consist of finished goods merchandise. Inventory by segment is set forth below:
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment Property and equipment, net, consist of the following:
Long-Lived Asset Impairments The charges below reduced the net carrying value of certain long-lived assets to their estimated fair value, which was determined based on discounted expected cash flows. These impairment charges arose from the Company's routine assessment of under-performing retail stores and are included as a component of Selling, general and administrative expenses in the accompanying consolidated statements of operations for all periods. Impairment charges related to long-lived tangible assets by segment are as follows:
________ (a) The Company incurred additional store impairment charges of $15.2 million in Fiscal 2018 and $14.0 million in Fiscal 2017 in connection with the fleet optimization review, which are considered to be outside the Company’s quarterly real-estate review and are included within Restructuring and other related charges, as more fully described in Note 7. Depreciation The Company recognized depreciation expense of $346.0 million in Fiscal 2018, $372.4 million in Fiscal 2017 and $341.5 million in Fiscal 2016, which is classified within Depreciation and amortization expense in the accompanying consolidated statements of operations. |
Prepaid Expenses and Other Current Assets |
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Prepaid Expense and Other Assets, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following:
________ (a) Increase reflects timing of prepaid rent as a result of the shift in fiscal year end dates resulting from the 53rd week. |
Accrued Expenses and Other Current Liabilities |
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Accounts Payable and Accrued Liabilities, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt consists of the following:
_______ (a) The unamortized debt issuance costs are amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) The original issue discount and debt issuance costs for the term loan are amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. Amended Revolving Credit Agreement On February 28, 2018, the Company and certain of its domestic subsidiaries entered into an amendment and restatement agreement of its revolving credit agreement dated August 21, 2015, as amended October 31, 2016, among the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the "Amended Revolving Credit Agreement"). The Amended Revolving Credit Agreement provides aggregate revolving commitments up to $500 million, with an optional increase of up to $200 million. The revolving credit facility may be used for the issuance of letters of credit, to fund working capital requirements and capital expenditures, and for general corporate purposes. The revolving credit facility also includes a $200 million letter of credit sublimit, of which $100 million can be used for standby letters of credit, and a $30 million swing loan sublimit. The interest rates, pricing and fees under the agreement fluctuate based on the average daily availability, as defined therein. The Amended Revolving Credit Agreement extends the maturity of the Company’s revolving credit facility from August 2020 to the earlier of (i) 5 years from the closing date (or February 2023) or (ii) 91 days prior to the maturity date of the Term Loans (unless (a) the outstanding principal amount of the Term Loans is $150 million or less and (b) the Company maintains liquidity (which can include (1) availability under the revolving credit facility in excess of the greater of $100 million and 20% of the credit limit and (2) cash held in a controlled account of the administrative agent of the revolving credit facility) in an amount equal to the outstanding principal amount of the remaining Term Loans. There are no mandatory reductions in aggregate revolving commitments throughout the term of the Amended Revolving Credit Agreement. However, availability under the revolving credit facility is limited to a percentage of the amount of eligible cash, eligible inventory and eligible credit card accounts receivable as defined in the Amended Revolving Credit Agreement. Throughout the term of the Amended Revolving Credit Agreement, the Company can elect to borrow either Alternative Base Rate Borrowings ("ABR Borrowings") or Eurodollar Borrowings. Eurodollar Borrowings bear interest at a variable rate using the LIBOR for such Interest Period plus an applicable margin ranging from 125 basis points to 150 basis points based on the Company’s average availability during the previous fiscal quarter. ABR Borrowings bear interest at a variable rate determined using a base rate equal to the greatest of (i) prime rate, (ii) federal funds rate plus 50 basis points or (iii) one-month LIBOR plus 100 basis points; plus an applicable margin ranging from 25 basis points to 50 basis points based on the average availability during the previous fiscal quarter. Under the terms of the Amended Revolving Credit Agreement, the unutilized commitment fee ranges from 20 basis points to 25 basis points per annum based on the Company's average utilization during the previous fiscal quarter. As of August 4, 2018, there were no borrowings outstanding under the Amended Revolving Credit Agreement. After taking into account the $27.1 million in outstanding letters of credit, the Company had $472.9 million of availability under the Amended Revolving Credit Agreement. Term Loan In connection with the ANN Acquisition, the Company entered into a $1.8 billion variable-rate term loan (the "Term Loan"), which was issued at a 2% discount and provides for an additional term facility of $200 million. The Company is also eligible to borrow an unlimited amount, as long as the Company maintains a minimum senior secured leverage ratio as defined in the Term Loan (the "Senior Secured Leverage Ratio") among other requirements. The Term Loan matures on August 21, 2022 and required quarterly repayments of $4.5 million during the first half of Fiscal 2017 and $22.5 million thereafter, with a remaining balloon payment of approximately $1.2 billion required at maturity. The Company made repayments totaling $225.0 million during Fiscal 2018 of which $180.0 million was applied to future quarterly scheduled payments such that the Company is not required to make its next required quarterly payment of $22.5 million until November of Fiscal 2021. The Company is also required to make mandatory prepayments in connection with certain prepayment events, including (i) commencing with the fiscal year ending July 29, 2017 if the Company has excess cash flow, as defined in the Term Loan, for any fiscal year and the Senior Secured Leverage Ratio for such fiscal year exceeds certain predetermined limits and (ii) from Net Proceeds, as defined in the Term Loan, of asset dispositions and certain casualty events that are greater than $25 million in the aggregate in any fiscal year and not reinvested (or committed to be reinvested) within one year, in each case subject to certain conditions and exceptions. No such mandatory prepayments are due for Fiscal 2018. The Company has the right to prepay the Term Loan in any amount and at any time with no prepayment penalties. At the time of initial borrowings and renewal periods throughout the term of the Term Loan, the Company may elect to borrow either ABR Borrowings or Eurodollar Borrowings. Eurodollar Borrowings bear interest at a variable rate using LIBOR (subject to a 75 basis points floor) plus an applicable margin of 450 basis points. ABR Borrowings bear interest at a variable rate determined using a base rate (subject to a 175 basis points floor) equal to the greatest of (i) prime rate, (ii) federal funds rate plus 50 basis points or (iii) LIBOR plus 100 basis points, plus an applicable margin of 350 basis points. As of August 4, 2018, borrowings under the Term Loan consisted entirely of Eurodollar Borrowings at a rate of 6.625%. In connection with the Fiscal 2018 principal prepayments of $180.0 million referred to above, the Company recorded a $5.0 million loss on the early extinguishment of debt. During Fiscal 2016, the Company repurchased $72.0 million of the outstanding principal balance of the Term Loan at an aggregate cost of $68.4 million through open market transactions, resulting in $0.8 million in pre-tax gains, net of the proportional write-off of unamortized original discount and debt issuance costs of $2.8 million. Such net gain has been recorded as Gain on extinguishment of debt in the consolidated statements of operations. Restrictions under the Term Loan and the Amended Revolving Credit Agreement (collectively the "Borrowing Agreements") Under the Amended Revolving Credit Agreement, the Company is required to maintain a fixed charge coverage ratio, as defined in the Amended Revolving Credit Agreement, of at least 1.00 any time in which the Company is in a covenant period, as defined in the Amended Revolving Credit Agreement (the "Covenant Period"). Such Covenant Period is in effect if Availability is less than the greater of (a) 10% of the Credit Limit (the lesser of total Revolving Commitments and the Borrowing Base) and (b) $37.5 million for three consecutive business days and ends when Availability is greater than these thresholds for 30 consecutive days. The Covenant Period was not in effect as of August 4, 2018. The Borrowing Agreements contain customary negative covenants, subject to negotiated exceptions, on (i) liens and guarantees, (ii) investments, (iii) indebtedness, (iv) significant corporate changes including mergers and acquisitions, (v) dispositions and (vi) restricted payments, cash dividends, stock repurchases and certain other restrictive agreements. The Borrowing Agreements also contain customary events of default, such as payment defaults, cross-defaults to certain material indebtedness, bankruptcy and insolvency, the occurrence of a defined change in control, or the failure to observe the negative covenants and other covenants related to the operation of the Company’s business, in each case subject to customary grace periods. The Company's Amended Revolving Credit Agreement allows us to make restricted payments, including dividends and share repurchases, subject to the Company satisfying certain conditions set forth in the Company's Amended Revolving Credit Agreement, notably that at the time of and immediately after giving effect to the restricted payment, (i) there is no default or event of default, and (ii) Availability is not less than 20% of the aggregate revolving commitments. The Company's Term Loan allows us to make restricted payments, including dividends and share repurchases, up to a predetermined dollar amount. The dollar amount limitation is waived upon the satisfaction of certain conditions under the Term Loan, notably that at the time of and immediately after giving effect to such restricted payment, (i) there is no default or event of default, and (ii) the total leverage ratio, as defined in the Term Loan agreement, is below predetermined limits. Dividends are payable when declared by our Board of Directors. The Company’s obligations under the Borrowing Agreements are guaranteed by certain of its domestic subsidiaries (the “Subsidiary Guarantors”). As collateral under the Borrowing Agreements and the guarantees thereof, the Company and the Subsidiary Guarantors have granted to the administrative agents for the benefit of the lenders a first priority lien on substantially all of their tangible and intangible assets, including, without limitation, certain domestic inventory and certain material real estate. Maturities of Debt The Company's debt matures as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the lowest level of inputs used that are significant to the fair value measurement as of the measurement date as follows:
Fair Value Measurements of Financial Instruments As of August 4, 2018 and July 29, 2017, the Company believes that the carrying value of cash and cash equivalents approximates its fair value based on Level 1 measurements. The fair value of the Term Loan was determined to be $1.258 billion as of August 4, 2018 and $1.345 billion as of July 29, 2017 based on quoted market prices from recent transactions, which are considered Level 2 inputs within the fair value hierarchy. Fair Value Measurements of Long-lived Assets Measured on a non-Recurring Basis As more fully described in Note 7 and Note 9, during Fiscal 2018, assets of $65.0 million related to (i) 327 under-performing stores and (ii) 105 stores and one office building under the fleet optimization review were written down to their estimated fair values of $15.8 million, resulting in total impairment charges of $49.2 million. In Fiscal 2017, store-related assets of $38.4 million related to approximately 120 under-performing stores and approximately 130 stores under the fleet optimization review were written down to their estimated fair values of $2.8 million, resulting in total impairment charges of $35.6 million. Key assumptions used to determine fair values were future cash flows including, among other things, expected future operating performance, changes in economic conditions as well as other market information obtained from brokers. Significant inputs related to valuing the store-related assets are classified as Level 3 in the fair value measurement hierarchy. For further discussion of the determination of fair values of goodwill and other intangible assets, see Note 6. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Taxes on Income Domestic and foreign pretax (loss) is as follows:
The (benefit) provision for current and deferred income taxes is as follows:
Tax Cuts and Jobs Act Overview In December 2017, the 2017 Tax Cuts and Jobs Act (the "2017 Act") was signed into law. The 2017 Act makes broad and complex changes to the U.S. tax code that will affect the Company in Fiscal 2018, including, but not limited to: (1) reducing the U.S. federal corporate tax rate; (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years at the election of the taxpayer; (3) bonus depreciation that will allow for full expensing of qualified property placed in service after September 27, 2017; and (4) elimination of the Company's ability to carryback net operating losses ("NOLs"), and extending the carryforward period from 20 years to an indefinite carryforward. The 2017 Act also establishes new tax laws that could affect the Company in future fiscal years, including, but not limited to: (1) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (2) a new provision that could increase the Company's tax liability on its offshore business (Global Intangible Low Taxed Income, or "GILTI"); (3) creation of the base erosion anti-abuse tax (BEAT), a new minimum tax; (4) a new limitation on deductible interest; (5) elimination and/or limitations on the deductibility of certain benefits; (6) annual limitation on use of NOLs to 80%; and (7) increased limitations on the deductibility of certain executive compensation. The SEC staff issued Staff Accounting Bulletin Number 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the 2017 Act. SAB 118 provides a measurement period that should not extend beyond one year from the 2017 Act enactment date of December 22, 2017 for companies to complete the accounting under Accounting Standards Codification Topic 740, “Income Taxes” ("ASC 740"). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the 2017 Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the 2017 Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the 2017 Act. For various reasons that are discussed in greater detail below, the Company has not completed its accounting for the income tax effects of certain elements of the 2017 Act. In cases where the Company was able to make reasonable estimates of the effects of elements for which its analysis is not yet complete, the Company recorded provisional adjustments. If the Company was not yet able to make reasonable estimates of the impact of certain elements, the Company has not recorded any adjustments related to those elements and has continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the 2017 Act. The Company is still in the process of determining the full impact of the 2017 Act, however, based on its current interpretation of the 2017 Act, the Company made reasonable estimates to record provisional amounts during Fiscal 2018, which are discussed in more detail below. However, the Company's accounting for those elements of the 2017 Act is incomplete. Since the Company is still evaluating the provisions of the 2017 Act and refining its estimates and expects regulators to issue further guidance and interpretation on the application of the law, the Company believes its estimates may change within the measurement period allowed, which will be completed no later than December 2018. A summary of the provisional amounts recorded under the 2017 Act, inclusive of amounts recorded in Fiscal 2018 are described in more detail below, is as follows:
Provisional adjustments recorded The Company was able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments that resulted in a total net benefit of $48.5 million. A summary of the significant aspects of the 2017 Act are discussed below: Reduction of U.S. Federal Corporate Tax Rate As a result of enactment of the 2017 Act, the Company revised its estimated annual effective tax rate to reflect a change in the U.S. statutory tax rate. The 2017 Act reduces the U.S. federal corporate tax rate to 21% in our Fiscal 2018; however, Section 15 of the Internal Revenue Code stipulates that the reduction in the corporate tax rate is applied to fiscal year taxpayers by computing a blended tax rate, based on the applicable tax rates before and after the effective date of the change in the statutory rate. When applied to the Company’s fiscal year, this blended rate was estimated at 27% for Fiscal 2018. The Company has recorded a provisional discrete tax benefit of $28.3 million attributable to remeasuring the Company’s deferred tax liabilities and deferred tax assets. Transition Tax The Company recorded a provisional discrete federal tax expense of $24.6 million and a provisional discrete state tax expense of $0.7 million during Fiscal 2018. The Company reasonably estimates that it has sufficient foreign tax credits and general business tax credits to offset most of the federal tax payable for Fiscal 2018 by electing Internal Revenue Code Section 965(n) ("Section 965(n)") and deferring the use of Federal NOLs. After taking into account the tax credits, the net federal transition tax liability is estimated at $3.8 million. The net federal transition tax is payable at the election of the taxpayer in eight annual installments, with the Company's first payment of $0.3 million to be made by the due date of its Fiscal 2018 federal tax return due November 15, 2018. As a result of the Section 965(n) election, Federal NOLs that otherwise would be available to offset against the taxable income generated by the transition tax will be deferred to Fiscal 2019. Due to uncertainty about aspects of the tax law, the Company made reasonable estimates as to its interpretation of the tax law that will be refined as additional regulations are issued. Executive Compensation Limitation The 2017 Act expands the definition under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) of a covered employee and provides that, for specified employees, status as a covered employee continues for all subsequent tax years, including years after the death of the individual, and, among other modifications, repeals the exception for performance-based compensation and commissions from the $1 million deduction limitation. In addition, the 2017 Act provides for transitional guidance that will allow certain payments made under written and binding agreements entered into prior to November 2, 2017 to be treated as if they were made under the provisions of Section 162(m) that were in effect prior to enactment of the 2017 Act. The Company, after an initial analysis and using available guidance, recorded a provisional discrete tax expense of $1.3 million valuation allowance in Fiscal 2018, related to the executive compensation provisions of the 2017 Act. Further revisions to the Company's estimate may be made once additional clarification of the new rules is available. Reversal of DTL Previously Recorded on Unremitted Earnings As a result of U.S. tax reform legislation, distributions of profits from non-U.S. subsidiaries are not expected to cause a significant U.S. tax impact in the future. However, these distributions may be subject to U.S. state income taxes and non-U.S. withholding taxes if profits are distributed in future years. For Fiscal 2018, the Company has provisionally estimated a deferred tax liability ("DTL") of $0.4 million for U.S. state taxes and withholding taxes in non-U.S. jurisdictions where earnings are not considered indefinitely reinvested. The Company recorded a provisional discrete tax benefit of $46.8 million in Fiscal 2018 to reduce the prior DTL of $47.2 million to the provisional amount computed after considering the implications of tax reform. Additional information, including final state guidance, is needed before the Company can finalize the DTL attributable to unrepatriated earnings. Provisional adjustments not recorded The Company's accounting for the following elements of the 2017 Act is incomplete, and the Company was not able to make reasonable estimates of the effects, therefore, no provisional adjustments were recorded: GILTI The 2017 Act creates a new requirement that certain income earned by controlled foreign corporations (CFCs) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) 10% of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. The Company will not be subject to the GILTI provisions until Fiscal 2019. Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the 2017 Act and the application of ASC 740. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a Company’s measurement of its deferred taxes (the “deferred method”). The Company’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether the Company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because the determination of whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends not only on its current structure and estimated future results of global operations but also the Company’s intent and ability to modify its structure and/or its business, the Company is not yet able to reasonably estimate the effect of this provision of the 2017 Act. Therefore, the Company has not made any adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred taxes on GILTI. Deductibility of Interest Expense - Fiscal 2019 (not covered under SAB 118) The 2017 Act provides for a limitation on the deduction of business interest beginning with Fiscal 2019. The Company believes that for the initial four years that the limitation is applicable, which are fiscal years 2019-2022, a limitation should not apply. After Fiscal 2022, because of the scheduled statutory changes in the computation of adjusted taxable income, a limitation is more likely to apply. Effective Tax Rate The Company’s effective tax rate is reflective of the jurisdictions where the Company has operations. As shown below, the effective tax rate for Fiscal 2018 was 51.3%. The effective tax rate was impacted by the provisional net discrete tax benefit from the 2017 Tax Act as discussed above. This was offset by the discrete tax expense for the valuation allowance on the Company’s net state deferred tax asset ("DTA") discussed below and accounting for share-based compensation payments which is discussed in Note 4 to these consolidated financial statements. As a result of the Company’s recent financial performance and the limitations placed on the use of state income tax NOLs, the Company has determined it is appropriate to place a valuation allowance on certain of the Company’s net state DTAs. This discrete tax expense during Fiscal 2018 was $21.8 million after the federal income tax effect. The 2017 Act passed into law an indefinite lived carryover of federal NOLs generated in Fiscal 2018 and forward. For certain states that automatically conform to the 2017 Act, the NOL carryovers automatically become indefinite lived unless those states pass legislation to decouple from the federal provisions. The Company believes that individual states are still assessing the impact of the 2017 Act and to the extent states conform to the federal indefinite lived carryover of NOLs; the conformity could have an impact on the Company’s need for the valuation allowance on the state income tax DTA. As of July 29, 2017, the Company had a $16.9 million valuation allowance against the aggregate carrying value of its deferred tax assets. Such valuation allowances provide for the uncertainty that a portion of the recognized deferred tax assets may not be realizable. The valuation allowance increased by $37.4 million in Fiscal 2018 to $54.3 million as of August 4, 2018. As discussed above, $21.8 million is a result of its recent financial performance and $1.3 million is due to the limitation on the deductibility of certain executive compensation. An additional $12.1 million is from valuation allowances recorded on activity in Fiscal 2018 and $3.5 million due to the reduction of the U.S. federal corporate tax rate. This was offset by a release of $1.3 million due to expiration of capital loss carryover. Any portion of this valuation allowance attributable to the 2017 Act will continue to be reassessed during the measurement period provided by SAB 118 and adjusted, if appropriate. Tax Rate Reconciliation The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes provided are as set forth below:
_______ (a) The U.S. federal statutory rate for Fiscal 2017 and Fiscal 2016 was 35%. The 2017 Act reduced the statutory tax rate from 35% to 21% effective January 1, 2018, and under Section 15 of the Internal Revenue Code resulted in a blended statutory rate of 27% for Fiscal 2018. (b) Reflects the adoption of ASU 2016-09. Refer to Note 4 for more information. As more fully described in Note 6, the Company recorded goodwill impairment charges of $596.3 million during Fiscal 2017, of which $69.8 million for maurices (using the pro rata method) was tax deductible and the remaining $526.5 million was non-deductible for income tax purposes and treated as a permanent item. Tax Incentives In connection with the Company’s relocation of its dressbarn and corporate offices to New Jersey, as well as the expansion of its distribution centers in Ohio and Indiana, the Company was approved for various state and local tax incentives. In order to receive these incentives, the Company will generally need to meet certain minimum employment or expenditure commitments, as well as comply with periodic reporting requirements. These incentives, estimated to total approximately $39.5 million, are expected to be recognized over a 10-15 year period. Approximately $4.3 million was recognized in Fiscal 2018, $6.1 million in Fiscal 2017 and $2.9 million in Fiscal 2016. Deferred Taxes Significant components of the Company's net deferred tax liabilities are as follows:
_______ (a) Deferred tax assets of $3.5 million as of August 4, 2018 and $4.0 million as of July 29, 2017 are included within Other assets. Net Operating Loss Carry Forwards As of August 4, 2018, the Company had U.S. Federal net operating loss carryforwards of $98.0 million and state net operating loss carryforwards of $389.3 million that are available to offset future U.S. Federal and state taxable income. The U.S. Federal net operating losses generated prior to Fiscal 2018 have a twenty-year carryforward period, with $48.8 million to expire in Fiscal 2036 and $32.5 million to expire in Fiscal 2037. Due to the 2017 Act, the U.S. Federal net operating losses generated in Fiscal 2018 and forward have an unlimited carryforward, therefore, $16.7 million estimated in Fiscal 2018 will carryforward indefinitely. The state net operating losses have carryforward periods of five to twenty years, with varying expiration dates and amounts as follows: $29.9 million in one to five years, $28.0 million in six to ten years, $54.8 million in eleven to fifteen years and $276.6 million in sixteen to twenty years. Uncertain Income Tax Benefits Reconciliation of Liabilities A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is presented below:
The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. A reconciliation of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits is presented below:
The Company’s liability for unrecognized tax benefits (including accrued interest and penalties), which is primarily included in Other non-current liabilities in the accompanying consolidated balance sheets, was $69.4 million as of August 4, 2018 and $61.1 million as of July 29, 2017. Future Changes in Unrecognized Tax Benefits The amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company anticipates that the balance of the liability for unrecognized tax benefits will decrease by approximately $4.8 million during the next twelve months. However, changes in the occurrence, expected outcomes and timing of those events could cause the Company’s current estimate to change materially in the future. The Company’s portion of gross unrecognized tax benefits that would affect its effective tax rate, including interest and penalties, is $46.0 million. The Company files tax returns in the U.S. federal and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to examinations by the relevant tax authorities for years prior to Fiscal 2011. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Lease Commitments The Company leases all of its retail stores. Certain leases provide for additional rents based on percentages of net sales, charges for real estate taxes, insurance and other occupancy costs. Store leases generally have an initial term of approximately ten years, although certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. Leases may also have one or more five-year options to extend the lease or have provisions for rent escalations during the initial term. The Company’s operating lease obligations represent future minimum lease payments under non-cancelable operating leases as of August 4, 2018. The minimum lease payments do not include common area maintenance ("CAM") charges or real estate taxes, which are also required contractual obligations under the operating leases. In the majority of the Company’s operating leases, CAM charges are not fixed and can fluctuate from year to year.
The following is a schedule of future minimum rentals under non-cancelable operating leases as of August 4, 2018:
(a) Net of sublease income, which was not significant in any period. (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. Employment Agreements The Company has employment agreements with certain executives in the normal course of business which provide for compensation and certain other benefits. These agreements also provide for severance payments under certain circumstances. Other Commitments The Company enters into various cancelable and non-cancelable commitments during the year. Typically, those commitments are for less than a year in duration and are principally focused on the construction of new retail stores and the procurement of inventory. The Company normally does not maintain any long-term or exclusive commitments or arrangements to purchase merchandise from any single supplier. Preliminary commitments with the Company’s private-label merchandise vendors typically are made five to seven months in advance of planned receipt date. A portion of these merchandise purchase commitments are cancelable up to 30 days prior to the vendor’s scheduled shipment date. In addition, the Company has $27.1 million of outstanding letters of credit as of August 4, 2018. Legal Proceedings Justice Pricing Lawsuits The Company was a defendant in a number of class action lawsuits that allege, among other claims, that Justice’s promotional practices violated state comparative pricing laws in connection with advertisements promoting a 40% discount. The Company reached a settlement of one of these cases on a class wide basis as more fully described below. As a result of that settlement, all other related litigations against the Company were eventually dismissed. Mehigan v. Ascena Retail Group, Inc. and Tween Brands, Inc. On February 12, 2015, Melinda Mehigan and Fonda Kubiak, both consumers, filed a purported class action proceeding (the “Mehigan case”) against Ascena Retail Group, Inc. and Tween Brands, Inc. (doing business as “Justice”) in the United States District Court for the Eastern District of Pennsylvania, on behalf of themselves and all similarly situated consumers who, in the case of Ms. Mehigan in the State of New Jersey, and in the case of Ms. Kubiak in the State of New York, made purchases at Justice from 2009 to 2015 (the “Alleged Class Period”). The lawsuit alleges that Justice violated state comparative pricing laws in connection with advertisements promoting a 40% discount. The plaintiffs further allege false advertising, violation of state consumer protection statutes, breach of contract, breach of express warranty and unfair benefit to Justice. The plaintiffs sought to stop Justice’s allegedly unlawful practice and obtain damages for Justice’s customers in the named states. They also sought interest and legal fees. On February 17, 2015, the complaint in the Mehigan case was amended to add five more named individual plaintiffs and to add the same allegations against Justice in the States of California, Florida, Illinois and Texas. On April 8, 2015, the complaint in the Mehigan case was amended again to assert allegations on behalf of a purposed nationwide class. As amended, the case covered Justice customers in 47 states. The excluded states were Hawaii, Alaska and Ohio. During the Alleged Class Period, Justice did not operate any stores in Hawaii or Alaska. A similar class action lawsuit making substantially the same allegations as the Mehigan case was settled in December 2014 in Ohio. Cowhey v. Tween Brands, Inc. On February 17, 2015, Carol Cowhey, a consumer, filed a purported class action proceeding (the “Cowhey case”) against Ascena Retail Group, Inc. and Tween Brands, Inc. (doing business as “Justice”) in the Court of Common Pleas in Philadelphia, Pennsylvania on behalf of herself and all other similarly situated consumers who in the State of Pennsylvania made purchases at Justice during the Alleged Class Period. The allegations in the Cowhey case were substantially the same as those in the Mehigan case. The relief sought in the Cowhey case focused on remedies available under Pennsylvania law, which the plaintiff claimed included treble damages. On March 19, 2015, Justice removed the Cowhey case to federal court in the United States District Court for the Eastern District of Pennsylvania. Consolidation of Mehigan and Cowhey Cases (Rougvie) On April 8, 2015, the United States District Court for the Eastern District of Pennsylvania consolidated the Cowhey case and the Mehigan case. They were consolidated for all pre-trial purposes in the federal court in the Eastern District of Pennsylvania. On June 2, 2015, the court held a Rule 16 Conference and issued a Scheduling Order and Settlement Conference Order. The Scheduling Order sets a fact and expert discovery deadline of December 4, 2015, with trial scheduled for early 2016. In light of the settlement described below, however, the consolidated cases were dismissed with prejudice on July 29, 2016. Traynor-Lufkin v. Tween Brands, Inc. On March 6, 2015, Katie Traynor-Lufkin and three other named plaintiffs, all consumers, filed a purported nationwide class action (the “Traynor-Lufkin case”) against Tween Brands, Inc. (doing business as “Justice”) in the Court of Common Pleas in Cuyahoga County, Ohio. The Traynor-Lufkin case purported to include a class of Justice customers in 47 states. As with the Mehigan case, the Traynor-Lufkin case excludes Hawaii, Alaska and Ohio. During the Alleged Class Period, Justice did not operate any stores in Hawaii or Alaska. In December 2014, Justice settled a similar class action lawsuit in the State of Ohio. The allegations and damages sought in the Traynor-Lufkin case were substantially the same as those in the Mehigan case. Removal of Traynor-Lufkin Case and Motion to Transfer On April 7, 2015, Justice removed the Traynor-Lufkin case to the United States District Court for the Northern District of Ohio. On April 13, 2015, Justice filed a motion under 28 U.S.C. § 1404(a) to transfer the Traynor-Lufkin case to the United States District Court for the Eastern District of Pennsylvania. On May 27, 2015, the Traynor-Lufkin case was reassigned to the Eastern District of Pennsylvania. Consolidation of Traynor-Lufkin and Rougvie case On June 18, 2015, the United States District Court for the Eastern District of Pennsylvania consolidated the Cowhey case and the Mehigan case (collectively referred to as Rougvie) and the Traynor-Lufkin matters. The Scheduling and Settlement Conference Orders issued in the Rougvie matter were applicable to all parties in the Traynor-Lufkin and Rougvie cases, including the Company and all of the named plaintiffs in the consolidated actions. Metoyer v. Tween Brands, Inc. On May 29, 2015, Theresa Metoyer, a consumer, filed a purported class action (the "Metoyer Case") against Tween Brands, Inc. in the United States District Court for the Central Division of California, Eastern Division, on behalf of herself and all other similarly situated consumers who made purchases from Justice stores located in California during the four years preceding the filing of the lawsuit. The allegations in the Metoyer case were substantially the same as those in the other Justice pricing lawsuits described above. The relief sought by the plaintiff was substantially the same as that sought in the other lawsuits. On November 14, 2015, the Court granted the Company’s motion to stay the Metoyer case in light of the broader settlement described below. In the first quarter of Fiscal 2017, however, the plaintiff's counsel requested that the Court lift the stay to allow the plaintiff to pursue individual and potential class claims not subject to the broader settlement, and the Court ultimately granted that request. After the plaintiff filed an amended complaint, the Company agreed to a settlement with the plaintiff, and the Metoyer case was dismissed with prejudice on January 18, 2017. Gallagher v. Tween Brands, Inc. On June 4, 2015, Robert Gallagher, a consumer, filed a lawsuit against Tween Brands, Inc. in the United States District Court for the Eastern District of Missouri, Eastern Division. This lawsuit includes putative national and Missouri classes. The plaintiff seeks monetary damages and reasonable costs and attorneys' fees. On August 27, 2015, the Company filed its Answer to the Complaint. On October 15, 2015, the Court granted the Company’s motion to stay this case in light of the broader settlement described below. Subsequently, on July 2, 2018 the Court dismissed this action with prejudice. Kallay v. Tween Brands, Inc. On June 5, 2015, Andrea Kallay, a consumer, filed a purported class action against Tween Brands, Inc. in the United States District Court for the Southern District of Ohio, Eastern Division. This lawsuit includes putative national and Wisconsin classes. The plaintiff seeks monetary damages and reasonable costs and attorneys' fees. On August 28, 2015, the Company filed its Answer to the Complaint. On October 29, 2015, the Court granted the Company’s motion to stay this case in light of the broader settlement described below. Subsequently, on July 31, 2018 the Court dismissed this action with prejudice. Joiner v. Tween Brands, Inc. On June 1, 2015, Rebecca Joiner, a consumer, filed a purported class action against Tween Brands, Inc. in the United States District Court for the District of Maryland. This lawsuit includes putative national and Maryland classes. The plaintiff seeks monetary damages and reasonable costs and attorney’s fees. On August 28, 2015, the Company filed its Answer to the Complaint. On December 1, 2015, the Court granted the Company’s motion to stay this case in light of the broader settlement described below. Subsequently, on February 22, 2018 the Court dismissed this action with prejudice. Loor v. Tween Brands, Inc. On June 11, 2015, Yanetsy Loor, a consumer, filed a purported class action against Tween Brands, Inc. in the United States District Court for the Middle District of Florida. This lawsuit includes putative national and Florida classes. The plaintiff sought monetary damages and reasonable costs and attorney’s fees. On August 21, 2015, the Company filed its Answer to the Complaint. On December 1, 2015, the Court granted the Company’s motion to stay this case in light of the broader settlement described below. Subsequently, on August 10, 2017 the Court dismissed this action with prejudice. Legendre v. Tween Brands, Inc. On June 17, 2015, David Legendre, a consumer, filed a purported class action against Tween Brands, Inc. in the United States District Court for the District of New Jersey. This lawsuit includes putative national and New Jersey classes. The plaintiff seeks monetary damages and reasonable costs and attorney’s fees. On August 28, 2015, the Company filed its Answer to the Complaint. On December 11, 2015, the Court granted the Company’s motion to stay this case in light of the broader settlement described below. Subsequently, on December 11, 2017 the Court dismissed this action with prejudice. Settlement Agreed to at July 2, 2015 Mediation and Final Approval In July 2015, an agreement in principle was reached with the plaintiffs in the Rougvie case to settle the lawsuit on a class basis. The settlement resolved the lawsuit on a class basis for all Justice customers who made purchases between January 1, 2012 through February 28, 2015 for a cash payment of approximately $51 million, including payments to members of the class and payment of legal fees and expenses of settlement administration, including distribution of vouchers. The parties executed a formal Settlement Agreement dated September 24, 2015. The Company paid approximately $51 million representing the agreed cash settlement amount into an escrow account on November 16, 2015. Formal notice of settlement was sent to the class members on December 1, 2015. The final approval hearing was held on May 20, 2016. On July 29, 2016, the Court granted the parties’ joint motion for final approval of settlement and dismissed the case with prejudice. In reaching this conclusion, the Court rejected all of the objections to the settlement that had been raised, but did reduce the amount of attorneys’ fees to be paid to plaintiffs’ counsel out of the settlement amount. The Court's deduction of attorney's fees to be paid to plaintiff's counsel will have no impact on the agreed upon settlement amount of approximately $51 million. The Court’s decision granting final approval was appealed to the United States Court of Appeals for the Third Circuit. After a court-ordered mediation session on March 24, 2017, the appeals were withdrawn and dismissed with prejudice. The class settlement is now final and non-appealable. Distributions of cash and vouchers to class members pursuant to the settlement began on or about September 18, 2017 and were completed in advance of the deadline of October 27, 2017. Vouchers are presently being redeemed and are redeemable through October of 2018. As referenced above, the pricing lawsuits that were initially stayed, have now been formally dismissed. Potential claims related to purchases made in 2010 and 2011 have been raised, including in the Metoyer case discussed above, although no additional lawsuits have been filed. The Company believes it has strong defenses to any such claims and is prepared to defend any such claims. There is some possibility that individual class members who excluded themselves from the settlement may seek to pursue their own or additional claims, although the Company believes that the liability associated with those cases would not be material. Steven Linares v. ANN INC. On December 29, 2015, plaintiff, Steven Linares, a former sales associate, filed a class action complaint on behalf of all sales leads, sales associates and stock associates working in California from December 29, 2011 through the present, in Los Angeles County Superior Court. The plaintiff alleges on behalf of the class that ANN did not properly provide overtime pay, minimum wage pay, meal and rest breaks, and waiting time pay, among other claims under the California Business and Professions Code and California Labor Code. At mediation, the parties agreed to settle all claims in the suit for a total of $3.5 million to settle both the pending claims and other wage-and-hour claims that could have been brought as part of the lawsuit (including claims for penalties under the Private Attorneys’ General Act). The Company believes that such amount reflects a liability that is both probable and reasonably estimable, thus a reserve for approximately $3.5 million was established in the first quarter of Fiscal 2017. The parties executed a formal Joint Stipulation for Class Action Settlement and Release, dated February 6, 2017. The Joint Stipulation for Class Action Settlement and Release was preliminarily approved by the Court on April 25, 2017. On August 22, 2017, the Court granted the unopposed motion for final approval of Joint Stipulation for Class Action Settlement and Release. Pursuant to the Joint Stipulation for Class Action Settlement and Release distribution of the settlement funds were made to class members on October 24, 2017. Other litigation The Company is involved in routine litigation arising in the normal course of its business. In the opinion of management, such litigation is not expected to have a material adverse effect on the Company's consolidated financial statements. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Capital Stock The Company’s capital stock consists of one class of common stock and one class of preferred stock. There are 360 million shares, of common stock authorized to be issued and 100,000 shares of preferred stock authorized to be issued. There are no shares of preferred stock issued or outstanding. Common Stock Repurchase Program In December 2015, the Company’s Board of Directors authorized a $200 million share repurchase program (the “2016 Stock Repurchase Program”). Under the 2016 Stock Repurchase Program, purchases of shares of common stock may be made at the Company’s discretion from time to time, subject to overall business and market conditions. Currently, share repurchases in excess of $100 million are subject to certain restrictions under the terms of the Company's Borrowing Agreements, as more fully described in Note 12. Repurchased shares are retired and treated as authorized but unissued. The excess of repurchase price over the par value of common stock for the repurchased shares is charged entirely to retained earnings. Cumulative repurchases under the 2016 Stock Repurchase Program total 2.1 million shares of common stock, all of which were repurchased at an aggregate cost of $18.6 million in Fiscal 2016. No shares of common stock were repurchased in Fiscal 2018 and Fiscal 2017. The remaining availability under the 2016 Stock Repurchase Program was approximately $181.4 million at August 4, 2018. Net Loss Per Common Share Basic net loss per common share is computed by dividing the net loss applicable to common shares after preferred dividend requirements, if any, by the weighted-average number of common shares outstanding during the period. Diluted net income per common share adjusts basic net income per common share for the effects of outstanding stock options, restricted stock, restricted stock units and any other potentially dilutive financial instruments, only in the periods in which such effect is dilutive under the treasury stock method. The weighted-average number of common shares outstanding used to calculate basic net loss per common share is reconciled to those shares used in calculating diluted net loss per common share as follows:
(a) There was no dilutive effect of stock options, restricted stock and restricted stock units for all periods represented as the impact of these items was anti-dilutive because of the Company's net loss incurred during these periods. Options to purchase shares of common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive, and therefore not included in the computation of diluted net loss per common share. In addition, the Company has outstanding restricted stock units that are issuable only upon the achievement of certain service conditions. Any performance or market-based restricted stock units outstanding are included in the computation of diluted shares only to the extent the underlying performance or market conditions (a) are satisfied prior to the end of the reporting period or (b) would be satisfied if the end of the reporting period was the end of the related contingency period, and the result would be dilutive under the treasury stock method. Potentially dilutive instruments are not included in the computation of net loss per share for Fiscal 2018, Fiscal 2017 and Fiscal 2016 as the impact of those items would have been anti-dilutive due to the net loss incurred for these periods. For Fiscal 2018, Fiscal 2017 and Fiscal 2016, respectively, 24.1 million, 19.5 million and 17.1 million shares of anti-dilutive options and restricted stock units were excluded from the diluted share calculations. Dividends The Company has never declared or paid cash dividends on its common stock. However, payment of dividends is within the discretion of, and are payable only when declared by, the Company’s Board of Directors. Additionally, payments of dividends are limited by the Company's borrowing arrangements as described in Note 12. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Omnibus Incentive Plan The Company is authorized to issue up to 70.5 million shares of stock-based awards to eligible employees and directors of the Company under its amended and restated 2010 Stock Incentive Plan (the “2016 Omnibus Incentive Plan”). The 2016 Omnibus Incentive Plan provides for the granting of performance-based stock awards as well as performance-based cash incentive awards. The 2016 Omnibus Incentive Plan expires in November 2025. As of August 4, 2018, there were approximately 9.7 million shares remaining under the 2016 Omnibus Incentive Plan available for future grants. The Company issues new shares of common stock when stock option awards are exercised and restricted stock units vest. Impact on Results A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements is as follows:
Stock Options Stock option awards outstanding under the Company’s current plans have been granted at exercise prices that are equal to the market value of its common stock on the date of grant. Such options generally vest over a period of three, four or five years and expire at either seven or ten years after the grant date. The Company recognizes compensation expense ratably over the vesting period, net of estimated forfeitures. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted, which requires the input of both subjective and objective assumptions as follows: Expected Term — The estimate of expected term is based on the historical exercise behavior of grantees, as well as the contractual life of the option grants. Expected Volatility — The expected volatility factor is based on the historical volatility of the Company's common stock for a period equal to the expected term of the stock option. Risk-free Interest Rate — The risk-free interest rate is determined using the implied yield for a traded zero-coupon U.S. Treasury bond with a term equal to the expected term of the stock option. Expected Dividend Yield — The expected dividend yield is based on the Company's historical practice of not paying dividends on its common stock. The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the fiscal years presented were as follows:
A summary of the stock option activity under all plans during Fiscal 2018 is as follows:
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As of August 4, 2018, there was $10.5 million of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 1.2 years. There were no options exercised during Fiscal 2018. The total intrinsic value of options exercised during Fiscal 2017 was de minimis and during Fiscal 2016 was approximately $7.3 million. The total grant date fair value of options that vested during Fiscal 2018, Fiscal 2017 and Fiscal 2016, was approximately $11.2 million, $13.4 million and $13.7 million, respectively. Restricted Equity Awards The 2010 Stock Plan allowed for the issuance of shares of restricted stock and restricted stock units (“RSUs”) with service-based, market-based and performance-based conditions (collectively, “Restricted Equity Awards”). In Fiscal 2016, the Compensation Committee of the Board of Directors (the "Compensation Committee") approved the cancellation of the Company's then outstanding performance-based and market-based Restricted Equity Awards. As a result, the previously unrecognized expense related to the market-based Restricted Equity Awards was expensed in Fiscal 2016. In addition, the previously accrued expense related to the performance-based Restricted Equity Awards was derecognized in Fiscal 2016. Such amounts were de minimis and have been included within Selling, general and administrative expenses in the accompanying consolidated financial statements. Under the 2016 Omnibus Incentive Plan, shares of Restricted Equity Awards are issuable with service-based, market-based or performance-based conditions. Any shares of Restricted Equity Awards issued are counted against the shares available for future grant limit as 2.3 shares for every one Restricted Equity Award granted. In general, if options are canceled for any reason or expire, the shares covered by such options again become available for grant. If a share of restricted stock or a RSU is forfeited for any reason, 2.3 shares become available for grant. Service-based Restricted Equity Awards entitle the holder to receive unrestricted shares of common stock of the Company at the end of a vesting period, subject to the grantee’s continuing employment. Service-based Restricted Equity Awards generally vest over a three or four year period of time. Performance-based Restricted Equity Awards also entitle the holder to receive shares of common stock of the Company at the end of a vesting period. However, such awards are subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over a pre-defined performance period. Performance-based Restricted Equity Awards generally vest at the completion of the performance period. The fair values of both service-based and performance-based Restricted Equity Awards are based on the fair value of the Company’s unrestricted common stock at the date of grant. Compensation expense for both service-based and performance-based Restricted Equity Awards is recognized over the vesting period based on the grant-date fair values of the awards that are expected to vest based upon the service and performance-based conditions. As of August 4, 2018, there are no restricted stock or RSUs with performance-based conditions issued under the 2016 Omnibus Incentive Plan. A summary of Restricted Equity Awards activity during Fiscal 2018 is as follows:
As of August 4, 2018, there was $7.0 million of total unrecognized compensation cost related to the service-based Restricted Equity Awards, which is expected to be recognized over a remaining weighted-average vesting period of 1.7 years. The total fair value of the service-based Restricted Equity Awards vested during Fiscal 2018, Fiscal 2017 and Fiscal 2016 was $2.8 million, $3.9 million and $4.9 million, respectively. The weighted-average grant-date fair value per share of the service-based Restricted Equity Awards granted during Fiscal 2018, Fiscal 2017 and Fiscal 2016 was $2.45, $5.28 and $12.72, respectively. |
Employee Benefit Plans |
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Aug. 04, 2018 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Long-Term Incentive Plans During Fiscal 2016, the Company created a long-term incentive program ("LTIP") for vice presidents and above under the 2016 Omnibus Incentive Plan. The LTIP entitles the holder to either a cash payment, or a stock payment for certain officers at the Company's option, equal to a predetermined target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over a one or three-year performance period. Compensation expense for the LTIP is recognized over the related performance periods based on the expected achievement of the performance goals. The Company recognized $(7.5) million, $14.1 million and $20.1 million in compensation expense under the LTIP during Fiscal 2018, Fiscal 2017 and Fiscal 2016, respectively, which was recorded within Selling, general and administrative expenses in the accompanying consolidated financial statements. The net credits recorded in Fiscal 2018 primarily reflect (1) the Compensation Committee's determination in late September 2017 that although certain metrics within the 2017 LTIP were achieved, negative discretion should be applied based upon the overall performance of the Company, thus the LTIP amounts were not distributed and (2) the Company's determination in Fiscal 2018 that certain performance targets for the 2018 LTIP year would not be achieved. As of August 4, 2018, there was $28.4 million of expected unrecognized compensation cost related to the LTIP, which is expected to be recognized over a remaining weighted-average vesting period of 1.9 years. As of August 4, 2018, the liability for LTIP Awards was $14.9 million, which was all classified within Other non-current liabilities in the accompanying consolidated balance sheets. No amounts were paid during Fiscal 2018 and $10.4 million was paid during Fiscal 2017. Retirement Savings Plan (401(k)) The Company currently sponsors a defined contribution retirement savings plan (the "401(k)" plan). This plan covers substantially all eligible U.S. employees. Participating employees may contribute a percentage of their annual compensation, subject to certain limitations under the U.S Internal Revenue Code. The Company's contribution is made in accordance with a matching formula established prior to the beginning of each plan year. Effective with the plan year started January 1, 2015, the Company contributes a matching amount based on eligible salary contributed by an employee equal to 100% of the first 3% contributed and 50% of the next 2% contributed. Under the terms of the plan, such matching contributions are immediately vested. The Company incurred expenses relating to its contributions to and administration of its 401(k) plan of $15.8 million in Fiscal 2018, $17.1 million in Fiscal 2017 and $18.0 million in Fiscal 2016. Defined Benefit Plan In connection with the ANN Acquisition, the Company assumed ANN's pension plan which was frozen and for which the accumulated benefit obligation exceeded the plan's assets by approximately $12 million as of July 30, 2016. In Fiscal 2016, the Company made a decision to terminate the plan whereby, under the terms of liquidation, some participants elected to receive lump-sum payments while others elected to remain in the plan. During the first quarter of Fiscal 2017, lump sum payments were made to its participants, and during the second quarter of Fiscal 2017 the remaining obligation was transferred to a third-party and settled through a non-participating annuity contract. As of the end of the second quarter of Fiscal 2017, the trust was fully liquidated. During Fiscal 2017, the accumulated actuarial loss of $7.4 million (net of an income tax benefit of $2.9 million) was reclassified from Accumulated other comprehensive loss to Acquisition and integration expenses. In addition, the Company recorded total settlement charges and professional fees of $8.0 million within Acquisition and integration expenses during Fiscal 2017. Executive Retirement Plan The Company sponsors an Executive Retirement Plan (the “ERP Plan”) for certain officers and key executives. The ERP Plan is a non-qualified deferred compensation plan. The purpose of the ERP Plan is to attract and retain a select group of management and to provide them with an opportunity to defer compensation on a pretax basis above U.S. Internal Revenue Service limitations. ERP Plan balances cannot be rolled over to another qualified plan or IRA upon distribution. Unlike a qualified plan, the Company is not required to pre-fund the benefits payable under the ERP Plan. ERP Plan participants can contribute up to 50% of base salary and 75% of bonuses, before federal and state taxes are calculated. The Company makes a matching contribution to the ERP Plan in the amount of 100% on the first 1% of base salary and bonus salary deferred up to $270,000. The Company makes an additional matching contribution to the ERP Plan in the amount of 100% on the first 5% of base salary and bonus salary deferred in excess of $270,000. Plan participants vest immediately in their voluntary deferrals and are incrementally vested in their employer matching contributions over a five year vesting period after which they are 100% vested. The Company incurred expenses related to its matching contributions of approximately $1.0 million in Fiscal 2018, $0.9 million in Fiscal 2017 and $1.9 million in Fiscal 2016 relating to the ERP Plan. In addition, as the ERP Plan is unfunded by the Company, the Company is also required to pay an investment return to participating employees on all account balances in the ERP Plan based on 27 reference investment fund elections offered to participating employees. As a result, the Company’s obligations under the ERP Plan are subject to market appreciation and depreciation, which resulted in expense of $6.7 million in Fiscal 2018, $8.6 million in Fiscal 2017 and $1.4 million in Fiscal 2016. The Company’s obligations under the ERP Plan, including employee compensation deferrals, matching employer contributions and investment returns on account balances, were $71.6 million as of August 4, 2018 and $71.1 million as of July 29, 2017. As of August 4, 2018, $4.2 million was classified within Accrued expenses and other current liabilities and $67.4 million was classified within Other non-current liabilities in the accompanying consolidated balance sheets. As of July 29, 2017, $8.1 million was classified within Accrued expenses and other current liabilities and $63.0 million was classified within Other non-current liabilities in the accompanying consolidated balance sheets. Employee Stock Purchase Plan The Company also sponsors an Employee Stock Purchase Plan, which allows employees to purchase shares of the Company’s common stock during each quarterly offering period at a 15% discount through payroll deductions. Expenses incurred during Fiscal 2018 and Fiscal 2017 relating to this plan were de minimis. During the fourth quarter of Fiscal 2017 the plan reached the maximum number of authorized shares to be issued and purchases under the plan were automatically terminated. On December 7, 2017, stockholders approved an amended and restated Employee Stock Purchase Plan effective as of January 1, 2018. The principal purpose of adopting this amended and restated plan was to approve a 4,000,000 share increase to the number of shares of common stock available for issuance under the plan. Purchases under the amended and restated plan began in the third quarter of Fiscal 2018. |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments The Company's segment reporting structure reflects an approach designed to optimize the operational coordination and resource allocation of its businesses across multiple functional areas including specialty retail, direct channel and licensing. The Company classifies its businesses into four operating segments: Premium Fashion, Value Fashion, Plus Fashion and Kids Fashion. Each segment is reviewed by the Company's Chief Executive Officer, who functions as the chief operating decision maker (the "CODM"), and is responsible for reviewing the operating activities, financial results, forecasts and business plans of the segment. Accordingly, the Company's CODM evaluates performance and allocates resources at the segment level. The four operating segments are as follows:
The accounting policies of the Company’s reporting segments are consistent with those described in Notes 3 and 4. All intercompany revenues are eliminated in consolidation. Corporate overhead expenses are allocated to the segments based upon specific usage or other reasonable allocation methods. Certain expenses including acquisition and integration expenses, restructuring and other related charges, and impairment charges of goodwill and other intangible assets have not been allocated to the segments, which is consistent with the CODM's evaluation of the segments. Net sales and operating income (loss) for each operating segment are as follows:
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(c) Restructuring and other related charges by operating segment are as follows:
(1) The charges incurred under the Company's Change for Growth program are more fully described in Note 7. Depreciation and amortization expense and capital expenditures for each operating segment are as follows:
(a) The results of the Premium Fashion segment for the post-acquisition period from August 22, 2015 to July 30, 2016 are included within the Company's consolidated results of operations for Fiscal 2016. (b) Includes capital expenditures for technology and supply chain infrastructure. The Company’s executive team does not regularly review asset information by operating segment and, as a result, we do not report asset information by operating segment. In addition, the Company’s operations are largely concentrated in the United States and Canada. Accordingly, net sales and long-lived assets by geographic location are not meaningful at this time. The Company’s revenues by major product categories as a percentage of total net sales are as follows:
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Additional Financial Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Financial Information | Additional Financial Information
Non-cash Transactions Non-cash investing activities include the accrued purchases of fixed assets in the amount of $21.4 million as of August 4, 2018, $26.6 million as of July 29, 2017 and $61.9 million as of July 30, 2016. During Fiscal 2016, in connection with the ANN Acquisition, as more fully described in Note 5, the Company issued 31.2 million shares of common stock valued at approximately $345 million, based on the Company's stock price on the date of the acquisition. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||
Revenue Recognition | Revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred, price has been fixed or is determinable and collectability is reasonably assured. Retail store revenue is recognized net of estimated returns at the time of sale to consumers. Direct channel revenue from sales of products ordered through the Company’s retail internet sites are recognized upon delivery and receipt of the shipment by our customers. Such revenue is reduced by an estimate of returns. Reserves for estimated product returns are recorded based on historical return trends and are adjusted for known events, as applicable. Reserves for estimated product returns were $19.9 million and $18.1 million as of August 4, 2018 and July 29, 2017, respectively. Gift cards, gift certificates and merchandise credits (collectively, “gift cards”) issued by the Company are recorded as a deferred income liability until they are redeemed, at which point revenue is recognized. Gift cards do not have expiration dates. The Company recognizes income for unredeemed gift cards when the likelihood of a gift card being redeemed by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recognized in Net sales over time based on the historical redemption patterns and historically has not been material. Revenue associated with merchandise shipments to other third-party retailers is recognized at the time title passes and risk of loss is transferred to customers, which generally occurs at the date of shipment. In addition to retail-store, direct channel and third-party sales, the Company's segments recognize revenue from (i) licensing arrangements with franchised stores, (ii) royalty payments received under license agreements for the use of their trade name and (iii) credit card agreements as it is earned in accordance with the terms of the underlying agreements. The Company accounts for sales and other related taxes on a net basis, thereby excluding such taxes from revenue. |
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Cost of Goods Sold | Cost of goods sold (“COGS”) consists of all costs of merchandise (net of purchase discounts and vendor allowances), merchandise acquisition costs (primarily commissions and import fees) and freight to our distribution centers and stores. These costs are determined to be directly or indirectly incurred in bringing an article to its existing condition and location. Additionally, the direct costs associated with shipping goods to customers and adjustments to the carrying value of inventory related to realizability and shrinkage are recorded as components of COGS. Our COGS and Gross margin may not be comparable to those of other entities. Some entities, like us, exclude costs related to their distribution network, buying function, store occupancy costs and depreciation and amortization expenses from COGS and include them in other operating expenses, whereas other entities include these costs in their COGS. |
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Buying, Distribution and Occupancy Expenses | Buying, distribution and occupancy expenses ("BD&O expenses") consist of store occupancy and utility costs, fulfillment expense (as defined below) and all costs associated with the buying and distribution functions (excluding depreciation). |
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Selling, General and Administrative Expenses | Selling, general and administrative expenses (“SG&A expenses”) consist of compensation and benefit-related costs for sales and store operations personnel, administrative personnel and other employees not associated with the functions described above under BD&O expenses. SG&A expenses also include advertising and marketing costs, information technology and communication costs, supplies for our stores and administrative facilities, insurance costs, legal costs and costs related to other administrative services. |
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Acquisition and Integration Expenses | Acquisition and integration expenses consist primarily of transaction expenses representing legal, consulting and investment banking-related costs that are direct, incremental costs incurred prior to the closing of an acquisition, costs to integrate the operations of acquired businesses into the Company's existing infrastructure and severance and retention-related expenses from integrating acquired businesses. |
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Restructuring and Other Related Charges | Restructuring and other related charges consist of severance and benefit costs, long-lived asset impairment charges and professional fees incurred in connection with identification and implementation of the initiatives associated with the Change for Growth program, as more fully described in Note 7. |
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Shipping and Fulfillment | Shipping and fulfillment fees billed to customers are recorded as revenue. The direct costs associated with shipping goods to customers are recorded as a component of COGS. Costs associated with preparing the merchandise for shipping, such as picking, packing, warehousing and order charges ("fulfillment expense") are recorded as a component of BD&O expenses. Fulfillment expense was approximately $53.4 million in Fiscal 2018, $41.0 million in Fiscal 2017 and $50.5 million in Fiscal 2016. |
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Marketing and Advertising Costs | Marketing and advertising costs are included in SG&A expenses. Marketing and advertising costs are expensed when the advertisement is first exhibited. Marketing and advertising expenses were $265.1 million for Fiscal 2018, $269.1 million for Fiscal 2017 and $270.6 million for Fiscal 2016. Deferred marketing and advertising costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were not material at the end of either Fiscal 2018, Fiscal 2017 or Fiscal 2016. |
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Foreign Currency Transactions and Translations | The operating results and financial position of foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. The resulting translation gains or losses are included in the consolidated statements of comprehensive loss, and in the consolidated statements of equity as a component of accumulated other comprehensive loss (“AOCI”). Gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature also are included within AOCI. The Company recognizes gains and losses on transactions that are denominated in a currency other than the respective entity's functional currency. Foreign currency transaction gains and losses also result from intercompany loans made to foreign subsidiaries that are not of a long-term investment nature and include amounts realized on the settlement of certain intercompany loans with foreign subsidiaries. Net losses (gains) from foreign currency transactions were $1.1 million in Fiscal 2018, $(0.4) million in Fiscal 2017 and $1.5 million in Fiscal 2016. Such amounts are recognized in earnings and included within Interest income and other income, net in the accompanying consolidated statements of operations. |
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Stock-based Compensation and Cash Long-Term Incentive Plans | The Company expenses stock-based compensation to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. The Company uses the Black-Scholes valuation method to determine the grant date fair value of its option-based compensation. Shares of restricted stock and restricted stock units are issuable with service-based, market-based or performance-based conditions (collectively, “Restricted Equity Awards”). Compensation expense for Restricted Equity Awards is recognized over the vesting period based on the grant-date fair values of the awards that are expected to vest based upon the service, market and performance-based conditions. Long-Term Incentive Plans The Company maintains a long-term cash incentive program ("LTIP") which entitles the holder to a cash payment equal to a target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over a one or three-year performance period. Compensation expense for the LTIP is recognized over the related performance periods based on the expected achievement of the performance goals. |
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Cash and Cash Equivalents | Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less and receivables from financial institutions related to credit card purchases due to the high-credit quality and short time frame for settlement of the outstanding amounts. |
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Concentration of Credit Risk | The Company maintains cash deposits and cash equivalents with well-known and stable financial institutions; however, there were significant amounts of cash and cash equivalents on deposit at overseas financial institutions as well as at financial institutions that were in excess of FDIC-insured limits at August 4, 2018. |
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Inventories | Retail Inventory Method We hold inventory for sale through our retail stores and direct channel sites. All of the Company's segments, other than our Premium Fashion segment discussed below, use the retail inventory method of accounting, under which inventory is stated at the lower of cost, on a First In, First Out (“FIFO”) basis, or market. Under the retail inventory method, the valuation of inventory at cost and the resulting gross margin are calculated by applying a calculated cost to retail ratio to the retail value of inventory. Inherent in the retail method are certain significant management judgments and estimates including, among others, initial merchandise markup, markdowns and shrinkage, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to a number of quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and mix of products in inventory, as well as changes in consumer preferences, market and economic conditions. The Company’s historical estimates of these costs and its markdown provisions have not differed materially from actual results. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. Weighted-average Cost Method Our Premium Fashion segment uses the weighted-average cost method to value inventory, under which inventory is valued at the lower of average cost or market, at the individual item level. Inventory cost is adjusted when the current selling price or future estimated selling price is less than cost. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. |
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Property and Equipment, net | Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives:
Certain costs associated with computer software developed or obtained for internal use are capitalized, including internal costs. The Company capitalizes certain costs for employees that are directly associated with internal use computer software projects once specific criteria are met. Costs are expensed for preliminary stage activities, training, maintenance and all other post-implementation stage activities as they are incurred. Property and equipment, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. In evaluating long-lived assets for recoverability, including finite-lived intangible assets as described below, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan of disposal are reported at the lower of carrying value or fair value less costs to sell. |
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Goodwill and Other Intangible Assets, net | At acquisition, the Company estimates and records the fair value of purchased intangible assets, which primarily consist of certain trade names, customer relationships, favorable leases, proprietary software and franchise rights. The fair value of these intangible assets is estimated based on management's assessment, considering independent third-party appraisals, when necessary. The excess of the purchase consideration over the fair value of net assets acquired is recorded as goodwill. Goodwill and certain other intangible assets deemed to have indefinite useful lives, including trade names and certain franchise rights, are not amortized but assessed for impairment annually or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable. Such assessment is performed using a quantitative approach at the reporting unit level. The reporting units identified for the purpose of the goodwill impairment assessment for all periods presented are ANN, maurices, dressbarn, Lane Bryant, Catherines and Justice, each of which represents the lowest level where discrete financial information is available and is regularly reviewed by segment managers. For Fiscal 2016, the annual impairment assessment was performed as of the first day of the fourth quarter and was determined using a two-step process. The first step of the goodwill impairment test was to identify potential impairment by comparing the fair value of a reporting unit with its net book value (or carrying amount), including goodwill. If the fair value of a reporting unit exceeded its carrying amount, goodwill of the reporting unit was considered not to be impaired and performance of the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeded its fair value, the second step of the goodwill impairment test was performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compared the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeded the implied fair value of that goodwill, an impairment loss was recognized in an amount equal to that excess. The implied fair value of goodwill was determined in the same manner as the amount of goodwill recognized in a business combination. The fair value of the reporting unit was then allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value was the purchase price paid to acquire the reporting unit. In Fiscal 2017, the Company adopted Accounting Standards Update ("ASU") 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes Step 2 of the goodwill impairment test requiring a hypothetical purchase price allocation. Under the new guidance, the Company evaluates assets for potential impairment, and then determines goodwill impairment by comparing the reporting unit's fair value to its carrying value. A goodwill impairment loss is recognized in an amount equal to the excess of the reporting unit's carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. This approach was also utilized for Fiscal 2018. The impairment test for other indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value. The fair value of indefinite-lived intangible assets is primarily determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to the excess. In addition, in evaluating finite-lived intangible assets for recoverability, we use our best estimate of future cash flows expected to result from the use of the asset and eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value. Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets (as discussed above), are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. Refer to the Company's accounting policy for long-lived asset impairment as described earlier under the caption "Property and Equipment, Net." |
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Insurance Reserves | The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers’ compensation, general liability and employee healthcare benefits. Liabilities associated with these risks are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Such liabilities are capped through the use of stop-loss contracts with insurance companies. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. As of August 4, 2018 and July 29, 2017, these reserves were $69.2 million and $73.1 million, respectively. The Company is subject to various claims and contingencies related to insurance and other matters arising out of the normal course of business. The Company is self-insured for expenses related to its employee medical and dental plans, its workers’ compensation plan and its general liability plan, up to certain thresholds. Claims filed, as well as claims incurred but not reported, are accrued based on management’s estimates, using information received from plan administrators, historical analysis and other relevant data. The Company’s stop-loss insurance coverage limit for individual claims under these policies is $750,000 for medical claims, $500,000 for workers' compensation claims and $150,000 for general liability claims. The Company believes its accruals for claims and contingencies are adequate based on information currently available. However, it is possible that actual results could differ significantly from the recorded accruals for claims and contingencies. |
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Income Taxes | Income taxes are provided using the asset and liability method. Under this method, income taxes (i.e., deferred tax assets and liabilities, current taxes payable/refunds receivable and tax expense) are recorded based on amounts refundable or payable in the current year, and include the results of any differences between U.S. GAAP and tax reporting. Deferred income taxes reflect the tax effect of net operating loss, capital loss and general business credit carry forwards and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The Company accounts for the financial effect of changes in tax laws or rates in the period of enactment. Valuation allowances are established when management determines that it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Tax valuation allowances are analyzed periodically and adjusted as events occur, or circumstances change, that warrant adjustments to those balances. In determining the income tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more-likely-than-not of being sustained upon audit, based solely on the technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. These assessments can be complex and the Company often obtains assistance from external advisors. To the extent that the Company’s estimates change or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. If the initial assessment fails to result in the recognition of a tax benefit, the Company regularly monitors its position and subsequently recognizes the tax benefit if (i) there are changes in tax law or analogous case law that sufficiently raise the likelihood of prevailing on the technical merits of the position to more-likely-than-not, (ii) the statute of limitation expires or (iii) there is a completion of an audit resulting in a settlement of that tax year with the appropriate agency. Uncertain tax positions are classified as current only when the Company expects to pay cash within the next twelve months. Interest and penalties, if any, are recorded within the benefit (provision) for income taxes in the Company’s accompanying consolidated statements of operations and are classified on the accompanying consolidated balance sheets with the related liability for uncertain tax positions. |
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Leases | The Company leases certain facilities and equipment, including its retail stores. Most of the Company's leases contain renewal options, rent escalation clauses and/or landlord incentives. Rent expense for non-cancelable operating leases with scheduled rent increases and/or landlord incentives is recognized on a straight-line basis over the lease term, beginning with the effective lease commencement date. The effective lease commencement date represents the date on which the Company takes possession of, or controls the physical use of, the leased property. The excess of straight-line rent expense over scheduled payment amounts and landlord incentives is recorded as a deferred rent liability and is classified on the consolidated balance sheets within Lease-related liabilities. Certain leases provide for contingent rents, which are determined as a percentage of gross sales in excess of specified levels. A contingent rent liability is recognized together with the corresponding rent expense when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives:
Property and equipment, net, consist of the following:
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Acquisition of ANN INC. (Tables) |
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Jul. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Acquiree's Post-acquisition Operational Results | The results of ANN for the post-acquisition period from August 22, 2015 to July 30, 2016 included in the Company’s accompanying consolidated statement of operations for Fiscal 2016 consist of the following:
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Business Acquisition, Pro Forma Information | The following pro forma information has been prepared as if the ANN Acquisition and the issuance of stock and debt to finance the acquisition had occurred as of the beginning of Fiscal 2015:
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Goodwill for each Reportable Segment | The following details the changes in goodwill for each reportable segment:
(a) The impairment loss for Fiscal 2017 represents the accumulated impairment loss at the ANN reporting unit and the maurices reporting unit as of August 4, 2018 and July 29, 2017. (b) The impairment loss for Fiscal 2017 represents impairment charges at the Lane Bryant reporting unit. The accumulated impairment loss at the Lane Bryant reporting unit was $321.9 million as of August 4, 2018 and July 29, 2017. |
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Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consist of the following:
________ (a) There were no finite-lived intangible asset impairment losses recorded for any of the periods presented. (b) The Company recorded impairment charges related to trade names during Fiscal 2017, as discussed below. |
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Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following:
________ (a) There were no finite-lived intangible asset impairment losses recorded for any of the periods presented. (b) The Company recorded impairment charges related to trade names during Fiscal 2017, as discussed below. |
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The expected amortization of customer relationships is as follows:
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Restructuring and Other Related Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Related Charges | As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges:
_______ (a) Severance and benefit costs reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. (b) Other related charges consist of professional fees and other related charges consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program, as well as third-party costs associated with the relocation of the Catherines brand to Ohio in Fiscal 2018. (c) Non cash asset impairments primarily reflect decisions within the Company's fleet optimization program to close certain under-performing stores as well as write-downs associated with a Plus Fashion segment building to fair market value. The amount for Fiscal 2018 includes asset impairments of $15.2 million and was offset by the write-off of $1.1 million of tenant allowances. (c) Restructuring and other related charges by operating segment are as follows:
(1) The charges incurred under the Company's Change for Growth program are more fully described in Note 7. |
Restructuring - Related Liabilities (Tables) |
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Restructuring - Related Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | A summary of activity for Fiscal 2017 and Fiscal 2018 in the restructuring-related liabilities associated with the Change for Growth program, which is included within Accrued expenses and other current liabilities, is as follows:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories by Brand | Inventory by segment is set forth below:
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives:
Property and equipment, net, consist of the following:
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Details of Impairment of Long-Lived Assets Held and Used by Asset | Impairment charges related to long-lived tangible assets by segment are as follows:
________ (a) The Company incurred additional store impairment charges of $15.2 million in Fiscal 2018 and $14.0 million in Fiscal 2017 in connection with the fleet optimization review, which are considered to be outside the Company’s quarterly real-estate review and are included within Restructuring and other related charges, as more fully described in Note 7. |
Prepaid Expenses and Other Current Assets (Tables) |
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Prepaid Expense and Other Assets, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following:
________ (a) Increase reflects timing of prepaid rent as a result of the shift in fiscal year end dates resulting from the 53rd week. |
Accrued Expenses and Other Current Liabilities (Tables) |
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Accounts Payable and Accrued Liabilities, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt consists of the following:
_______ (a) The unamortized debt issuance costs are amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) The original issue discount and debt issuance costs for the term loan are amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. |
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Schedule of Maturities of Long-term Debt | The Company's debt matures as follows:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | Domestic and foreign pretax (loss) is as follows:
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Provisions (Benefits) from Continuing Operations for Current and Deferred Income Taxes | The (benefit) provision for current and deferred income taxes is as follows:
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Provisional adjustments [Table Text Block] |
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Tax Rate Reconciliation | The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes provided are as set forth below:
_______ (a) The U.S. federal statutory rate for Fiscal 2017 and Fiscal 2016 was 35%. The 2017 Act reduced the statutory tax rate from 35% to 21% effective January 1, 2018, and under Section 15 of the Internal Revenue Code resulted in a blended statutory rate of 27% for Fiscal 2018. (b) Reflects the adoption of ASU 2016-09. Refer to Note 4 for more information. |
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Significant Components of Net Deferred Tax Assets (Liabilities) | Significant components of the Company's net deferred tax liabilities are as follows:
_______ (a) Deferred tax assets of $3.5 million as of August 4, 2018 and $4.0 million as of July 29, 2017 are included within Other assets. |
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Reconciliation of Beginning and Ending amounts of Unrecognized Tax Benefits, Excluding Interest and Penalties | A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is presented below:
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Reconciliation of Beginning and Ending Amounts of Accrued Interest and Penalties Related to Unrecognized Tax Benefits | The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. A reconciliation of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits is presented below:
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Occupancy Costs |
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Schedule of Future Minimum Rentals under Non-Cancelable Operating Leases | The following is a schedule of future minimum rentals under non-cancelable operating leases as of August 4, 2018:
(a) Net of sublease income, which was not significant in any period. (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. |
Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted-Average Common Shares Outstanding | The weighted-average number of common shares outstanding used to calculate basic net loss per common share is reconciled to those shares used in calculating diluted net loss per common share as follows:
(a) There was no dilutive effect of stock options, restricted stock and restricted stock units for all periods represented as the impact of these items was anti-dilutive because of the Company's net loss incurred during these periods. |
Stock-Based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Compensation Expense and Associated Income Tax Benefit | A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements is as follows:
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Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted | The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the fiscal years presented were as follows:
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Summary of Stock Option Activity Under all Plans | A summary of the stock option activity under all plans during Fiscal 2018 is as follows:
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Summary of Restricted Equity Awards Activity | A summary of Restricted Equity Awards activity during Fiscal 2018 is as follows:
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Segments (Tables) |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales and Operating Income for Each Segment | Net sales and operating income (loss) for each operating segment are as follows:
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(c) Restructuring and other related charges by operating segment are as follows:
(1) The charges incurred under the Company's Change for Growth program are more fully described in Note 7. |
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Restructuring and Other Related Charges | As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges:
_______ (a) Severance and benefit costs reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. (b) Other related charges consist of professional fees and other related charges consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program, as well as third-party costs associated with the relocation of the Catherines brand to Ohio in Fiscal 2018. (c) Non cash asset impairments primarily reflect decisions within the Company's fleet optimization program to close certain under-performing stores as well as write-downs associated with a Plus Fashion segment building to fair market value. The amount for Fiscal 2018 includes asset impairments of $15.2 million and was offset by the write-off of $1.1 million of tenant allowances. (c) Restructuring and other related charges by operating segment are as follows:
(1) The charges incurred under the Company's Change for Growth program are more fully described in Note 7. |
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Depreciation and Amortization Expense and Capital Expenditures for Each Segment | Depreciation and amortization expense and capital expenditures for each operating segment are as follows:
(a) The results of the Premium Fashion segment for the post-acquisition period from August 22, 2015 to July 30, 2016 are included within the Company's consolidated results of operations for Fiscal 2016. (b) Includes capital expenditures for technology and supply chain infrastructure. |
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Revenue from External Customers by Products and Services | The Company’s revenues by major product categories as a percentage of total net sales are as follows:
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Additional Financial Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 04, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Interest and Taxes |
|
Basis of Presentation (Details) |
12 Months Ended |
---|---|
Aug. 04, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and present the financial position, operational results, comprehensive loss and cash flows of entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include: evaluation of goodwill and other intangible assets for impairment; the realizability of inventory; impairments of long-lived tangible assets; and the realizability of deferred tax assets. |
Fiscal Year | Fiscal year 2018 ended on August 4, 2018 and reflected a 53-week period (“Fiscal 2018") as the Company conformed its fiscal periods to the National Retail Federation calendar; fiscal year 2017 ended on July 29, 2017 and reflected a 52-week period (“Fiscal 2017"); and fiscal year 2016 ended on July 30, 2016 and reflected a 53-week period (“Fiscal 2016”). All references to “Fiscal 2019” reflect a 52-week period that will end on August 3, 2019. The Company's Premium Fashion segment, which historically has followed the National Retail Federation calendar, recognized an additional week during the second quarter of Fiscal 2018, consistent with other retail companies already on that calendar. The Company's Value Fashion, Plus Fashion, and Kids Fashion segments recognized the 53rd week in the fourth quarter of Fiscal 2018 due to reporting systems constraints. The results of ANN, or our Premium Fashion segment, for the post-acquisition period from August 22, 2015 to July 30, 2016, have been included in the Company's consolidated statements of operations for Fiscal 2016. |
Summary of Significant Accounting Policies (Details) - Cash Settled LTIP Awards |
12 Months Ended |
---|---|
Aug. 04, 2018 | |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Recently Issued Accounting Standards (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Nov. 03, 2018 |
Aug. 04, 2018 |
|
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recently adopted standards In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification in the statement of cash flows. The new standard requires excess tax benefits and shortfalls to be recorded within the provision for income taxes in the consolidated statements of operations in the period they are realized. The impact of this change depends on changes in the Company's stock price and the timing of the exercise of stock options and the vesting of restricted stock units, so the full effect of the standard is not able to be quantified. However, the recognition of these changes within the consolidated statements of operations will likely result in increased volatility of our provision for income taxes and earnings. The Company adopted the guidance on a prospective basis in the first quarter of Fiscal 2018, and has recognized additional non-cash income tax expense of approximately $5.4 million in Fiscal 2018. Finally, in connection with the new standard, the Company has elected to maintain its practice of estimating forfeitures when recognizing expense for share-based payment awards rather than accounting for forfeitures when they occur. The other amendments of the standard are not expected to have a material impact on the Company's consolidated financial statements. Recently issued standards Revenue Recognition In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in FASB Accounting Standards Codification, "Revenue Recognition (Topic 605)." The guidance requires that an entity recognize revenue in a way that depicts the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. The guidance is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein, and will be adopted by the Company in Fiscal 2019. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company has determined that it will apply the new guidance using the modified retrospective basis. The Company has substantially completed its evaluation of the impact that adopting ASU 2014-09 will have on its consolidated financial statements and notes thereto. Based on these efforts, the Company currently anticipates that the performance obligations underlying its core revenue streams (its retail store and direct channel businesses) and related timing of revenue recognition thereof, will remain substantially unchanged. However, the new standard changes the accounting for certain of its customer loyalty and credit card programs. Under the new standard, the Company will account for its customer loyalty programs using a deferred revenue model which will defer revenue at the estimated fair value as the loyalty points are earned, as opposed to recording an expense in Cost of goods sold, and then recognize the revenue when the loyalty points are redeemed. Additionally, the Company will account for finance charges and other income under its credit card programs as variability is resolved. As a result, the Company currently expects to record a cumulative adjustment to opening retained earnings in Fiscal 2019 of approximately $5 million. Beginning in Fiscal 2019, the new standard requires the Company to make immaterial financial statement presentation changes related to its customer loyalty program and sales return reserve on a prospective basis. The adoption of this ASU will also result in enhanced footnote disclosure requirements during the first quarter of Fiscal 2019 including certain balance sheet activity and unsatisfied performance obligations related to certain promotional programs, primarily gift cards. Leases In February 2016, the FASB issued ASU 2016-02, "Leases." The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company is currently evaluating which transition method it will use to adopt the new guidance. The Company does not expect that the guidance will have a significant impact on its consolidated statements of cash flows and is currently evaluating the guidance and its impact on its other consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and short-term and long-term liabilities. The Company is also in the process of testing its lease administration system and is identifying changes to its business processes and controls to support adoption of the new standard in Fiscal 2020. |
|
Other Noncash Income Tax Expense | $ 5.4 | |
Subsequent Event [Member] | ||
Cumulative Effect on Retained Earnings, before Tax | $ 5.0 |
Acquisition of ANN INC. (Narrative) (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Aug. 21, 2015 |
Jul. 30, 2016 |
Aug. 04, 2018 |
Jul. 29, 2017 |
|
Business Acquisition [Line Items] | ||||
Common stock issued related to acquisition, value | $ 344.9 | |||
ANN | ||||
Business Acquisition [Line Items] | ||||
Percentage of interests acquired | 100.00% | |||
Aggregate purchase price to acquire business | $ 2,100.0 | |||
Payments to acquire businesses | $ 1,750.0 | |||
Common stock issued related to acquisition, shares | 31.2 | |||
Common stock issued related to acquisition, value | $ 345.0 | |||
Transaction costs | 20.8 | |||
Purchase accounting adjustments | 126.9 | |||
Pro forma adjustment | $ 82.2 | |||
Weighted average number of diluted shares outstanding | 1.2 | |||
Term loan | ||||
Business Acquisition [Line Items] | ||||
Debt maximum borrowing capacity | $ 1,800.0 | $ 1,371.5 | $ 1,596.5 | |
Term loan | ANN | ||||
Business Acquisition [Line Items] | ||||
Debt instrument term (years) | 7 years |
Acquisition of ANN INC. (Pro Forma Information) (Details) - ANN - USD ($) $ / shares in Units, $ in Millions |
11 Months Ended | 12 Months Ended |
---|---|---|
Jul. 30, 2016 |
Jul. 30, 2016 |
|
Business Acquisition [Line Items] | ||
Net sales | $ 2,330.9 | |
Net income (loss) | $ (40.3) | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Pro forma net sales | $ 7,119.1 | |
Pro forma net income | $ 70.3 | |
Pro forma net income per common share: | ||
Basic (in USD per share) | $ 0.36 | |
Diluted (in USD per share) | $ 0.36 |
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) - USD ($) $ in Millions |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, Beginning Balance | $ 683.0 | $ 1,279.3 | ||||||
Impairment of goodwill | 0.0 | (596.3) | $ 0.0 | |||||
Goodwill, Ending Balance | 683.0 | 683.0 | 1,279.3 | |||||
Lane Bryant | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill, Impaired, Accumulated Impairment Loss | (321.9) | |||||||
Goodwill [Roll Forward] | ||||||||
Impairment of goodwill | 60.2 | |||||||
Premium Fashion | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, Beginning Balance | 305.0 | 733.9 | ||||||
Impairment of goodwill | 0.0 | (428.9) | [1] | |||||
Goodwill, Ending Balance | 305.0 | 305.0 | 733.9 | |||||
Value Fashion | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, Beginning Balance | 93.5 | 200.7 | ||||||
Impairment of goodwill | 0.0 | (107.2) | [1] | |||||
Goodwill, Ending Balance | 93.5 | 93.5 | 200.7 | |||||
Plus Fashion | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, Beginning Balance | 115.1 | 175.3 | ||||||
Impairment of goodwill | 0.0 | (60.2) | [2] | |||||
Goodwill, Ending Balance | 115.1 | 115.1 | 175.3 | |||||
Kids Fashion | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill, Beginning Balance | 169.4 | 169.4 | ||||||
Impairment of goodwill | 0.0 | 0.0 | ||||||
Goodwill, Ending Balance | $ 169.4 | $ 169.4 | $ 169.4 | |||||
|
Goodwill and Other Intangible Assets (Amortization) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Aug. 21, 2015 |
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Recognized amortization expense on other intangible assets | $ 9.5 | $ 12.5 | $ 17.2 | ||||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||||
Total | [1] | 29.2 | 45.6 | ||||
Customer relationships | |||||||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||||
2019 | 7.0 | ||||||
2020 | 5.3 | ||||||
Total | [1] | $ 12.3 | 21.8 | ||||
Favorable Leasehold | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Acquired intangible assets useful life (years) | 4 years | ||||||
Recognized amortization expense on other intangible assets | $ 6.9 | 7.3 | |||||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||||
2019 | 6.4 | ||||||
2020 | 5.6 | ||||||
2021 | 2.4 | ||||||
2022 | 1.6 | ||||||
2023 and thereafter | 0.9 | ||||||
Total | [1] | $ 16.9 | $ 23.8 | ||||
ANN | Customer relationships | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Acquired intangible assets useful life (years) | 5 years | ||||||
|
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
Apr. 29, 2017 |
|
Goodwill [Line Items] | ||||
Income Valuation Approach | 85.00% | |||
Market Valuation Approach | 15.00% | |||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 8.00% | |||
Goodwill | $ 683.0 | $ 683.0 | $ 1,279.3 | |
Impairment of goodwill | 0.0 | (596.3) | 0.0 | |
Impairment of intangible assets | 0.0 | $ (728.1) | $ 0.0 | |
maurices | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | 107.2 | |||
Ann Taylor | ||||
Goodwill [Line Items] | ||||
Impairment of intangible assets | 210.0 | |||
ANN | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | 428.9 | |||
Loft | ||||
Goodwill [Line Items] | ||||
Impairment of intangible assets | 356.3 | |||
Lane Bryant | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | 60.2 | |||
Impairment of intangible assets | $ 161.8 |
Restructuring and Other Related Charges (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 03, 2018 |
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
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Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Capital Expenditures Incurred but Not yet Paid | $ 21.4 | $ 26.6 | $ 61.9 | ||||||||||||||||
Lease termination and store closure costs | 0.0 | 1.3 | |||||||||||||||||
Restructuring Charges | [1] | 78.5 | 81.9 | 0.0 | |||||||||||||||
Total impairment charges | 34.0 | [2] | 21.6 | [2] | 13.3 | ||||||||||||||
Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Restructuring Reserve | 10.1 | 22.4 | 0.0 | ||||||||||||||||
Restructuring Charges | 78.5 | 81.9 | |||||||||||||||||
Cash payments | (76.7) | (45.5) | |||||||||||||||||
Write-off of Tenant Allowance | 1.1 | ||||||||||||||||||
Cash-related restructuring charges [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Professional Fees | [3] | 59.2 | 33.4 | ||||||||||||||||
Severance Costs | [3] | 5.2 | 34.5 | ||||||||||||||||
Restructuring Charges | [3] | 64.4 | 67.9 | ||||||||||||||||
Cash-related restructuring charges [Member] | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Severance Costs | [4] | 5.2 | 33.2 | ||||||||||||||||
Restructuring Charges | 64.4 | 67.9 | |||||||||||||||||
Non-cash charges [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Restructuring Charges | 14.1 | 14.0 | |||||||||||||||||
Non-cash charges [Member] | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Restructuring Charges | 14.1 | 14.0 | |||||||||||||||||
Total impairment charges | [5] | 14.1 | 14.0 | ||||||||||||||||
Employee Severance [Member] | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Restructuring Reserve | 4.1 | 17.3 | 0.0 | ||||||||||||||||
Restructuring Charges | 5.2 | 33.2 | |||||||||||||||||
Cash payments | (18.4) | (15.9) | |||||||||||||||||
Lease termination and store closure costs [Member] | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Restructuring Reserve | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Restructuring Charges | 0.0 | 1.3 | |||||||||||||||||
Cash payments | 0.0 | (1.3) | |||||||||||||||||
Other Restructuring [Member] | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Restructuring Reserve | 6.0 | 5.1 | 0.0 | ||||||||||||||||
Restructuring Charges | 59.2 | 33.4 | [6] | ||||||||||||||||
Cash payments | (58.3) | (28.3) | |||||||||||||||||
Scenario, Forecast [Member] | Cash-related restructuring charges [Member] | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Professional Fees | $ 20.0 | ||||||||||||||||||
Capital Expenditures Incurred but Not yet Paid | $ 30.0 | ||||||||||||||||||
Plus Fashion | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Total impairment charges | 5.1 | [2] | 6.3 | [2] | $ 2.8 | ||||||||||||||
Plus Fashion | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Total impairment charges | 15.2 | ||||||||||||||||||
Plus Fashion | Non-cash charges [Member] | Change for Growth Program [Member] | |||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Total impairment charges | $ 4.4 | $ 4.8 | |||||||||||||||||
|
Inventories (Schedule of Inventories by Brand) (Details) - USD ($) $ in Millions |
Aug. 04, 2018 |
Jul. 29, 2017 |
---|---|---|
Inventory [Line Items] | ||
Inventories | $ 622.9 | $ 639.3 |
Premium Fashion | ||
Inventory [Line Items] | ||
Inventories | 212.2 | 208.2 |
Value Fashion | ||
Inventory [Line Items] | ||
Inventories | 153.9 | 180.6 |
Plus Fashion | ||
Inventory [Line Items] | ||
Inventories | 153.0 | 161.9 |
Kids Fashion | ||
Inventory [Line Items] | ||
Inventories | $ 103.8 | $ 88.6 |
Property and Equipment (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Millions |
Aug. 04, 2018 |
Jul. 29, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,829.9 | $ 2,793.1 |
Less: accumulated depreciation | (1,624.6) | (1,355.5) |
Property and equipment, net | 1,205.3 | 1,437.6 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 27.3 | 31.1 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 237.2 | 257.6 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 919.1 | 950.7 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 785.3 | 791.4 |
Information technology | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 831.8 | 708.0 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 29.2 | $ 54.3 |
Property and Equipment (Long-Lived Asset Impairments) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | $ 34.0 | [1] | $ 21.6 | [1] | $ 13.3 | ||||
Premium Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 2.3 | [1] | 0.7 | [1] | 0.0 | ||||
Value Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 24.8 | [1] | 11.1 | [1] | 8.1 | ||||
Plus Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 5.1 | [1] | 6.3 | [1] | 2.8 | ||||
Kids Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 1.8 | [1] | 3.5 | [1] | $ 2.4 | ||||
Change for Growth Program [Member] | Plus Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 15.2 | ||||||||
Non-cash charges [Member] | Change for Growth Program [Member] | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | [2] | 14.1 | 14.0 | ||||||
Non-cash charges [Member] | Change for Growth Program [Member] | Premium Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 6.5 | 3.2 | |||||||
Non-cash charges [Member] | Change for Growth Program [Member] | Value Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 3.0 | 4.4 | |||||||
Non-cash charges [Member] | Change for Growth Program [Member] | Plus Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | 4.4 | 4.8 | |||||||
Non-cash charges [Member] | Change for Growth Program [Member] | Kids Fashion | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Total impairment charges | $ 0.2 | $ 1.6 | |||||||
|
Property and Equipment (Depreciation) (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 346.0 | $ 372.4 | $ 341.5 |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Aug. 04, 2018 |
Jul. 29, 2017 |
||
---|---|---|---|---|
Prepaid Expense and Other Assets, Current [Abstract] | ||||
Prepaid expenses | [1] | $ 145.9 | $ 73.6 | |
Accounts and other receivables | 100.9 | 82.3 | ||
Short-term investments | 1.2 | 1.0 | ||
Other current assets | 0.5 | 0.5 | ||
Total prepaid expenses and other current assets | $ 248.5 | $ 157.4 | ||
|
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions |
Aug. 04, 2018 |
Jul. 29, 2017 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued salary, wages and related expenses | $ 129.7 | $ 147.4 |
Accrued operating expenses | 147.6 | 151.4 |
Sales tax payable | 26.8 | 20.6 |
Other | 22.2 | 33.5 |
Total accrued expenses and other current liabilities | $ 326.3 | $ 352.9 |
Debt (Schedule of Debt) (Details) - USD ($) $ in Millions |
Aug. 04, 2018 |
Jul. 29, 2017 |
Aug. 21, 2015 |
|||||
---|---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||||
Total maturities | $ 1,371.5 | |||||||
Less: current portion | 0.0 | $ (44.0) | ||||||
Long-term debt | 1,328.7 | 1,494.1 | ||||||
Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term Debt, Gross | 1,371.5 | 1,596.5 | $ 1,800.0 | |||||
Unamortized debt issuance costs | [1] | (20.5) | (28.8) | |||||
Unamortized original issue discount | [1] | (18.0) | (25.2) | |||||
Total maturities | $ 1,333.0 | 1,542.5 | ||||||
Debt interest rate, percentage | 6.30% | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term Debt, Gross | $ 0.0 | 0.0 | ||||||
Unamortized debt issuance costs | [2] | (4.3) | (4.4) | |||||
Total maturities | $ (4.3) | $ (4.4) | ||||||
|
Debt (Amended Revolving Credit Agreement) (Details) |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018
USD ($)
|
Jul. 29, 2017
USD ($)
|
Aug. 21, 2015
USD ($)
|
|
Debt Instrument [Line Items] | |||
Outstanding letter of credit | $ 27,100,000 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of credit, in excess of, percentage of credit limit | 20.00% | ||
Maximum borrowing capacity | $ 500,000,000 | ||
Optional additional increase in credit facility | 200,000,000 | ||
Long-term Debt, Gross | 0 | $ 0 | |
Outstanding letter of credit | 27,100,000 | ||
Amended revolving credit facility, remaining borrowing capacity | $ 472,900,000 | ||
Debt Instrument, Covenant, Percentage of Credit Limit | 10.00% | ||
Line of Credit Facility, Covenant Terms, Remaining Borrowing Capacity | $ 37,500,000 | ||
Line of credit facility, maturity, extension, years from closing date | 5 years | ||
Line of credit facility, maturity, extension,days prior to term loan maturity | 91 days | ||
Line of credit available, in excess of | $ 100,000,000 | ||
Revolving Credit Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee on unutilized revolving credit facility | 20.00% | ||
Debt Instrument, Covenant, Fixed Charge Coverage Ratio | 1.00 | ||
Debt Instrument, Covenant, Days of Availability | 3 days | ||
Revolving Credit Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee on unutilized revolving credit facility | 25.00% | ||
Debt Instrument, Covenant, Days of Availability | 30 days | ||
Eurodollar Borrowings | Revolving Credit Facility | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread | 125.00% | ||
Eurodollar Borrowings | Revolving Credit Facility | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread | 150.00% | ||
Alternative Base Rate Borrowings | Revolving Credit Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread | 100.00% | ||
Alternative Base Rate Borrowings | Revolving Credit Facility | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Applicable margin above base rate | 25.00% | ||
Alternative Base Rate Borrowings | Revolving Credit Facility | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Applicable margin above base rate | 50.00% | ||
Alternative Base Rate Borrowings | Revolving Credit Facility | Federal funds rate | |||
Debt Instrument [Line Items] | |||
Basis spread | 50.00% | ||
Letter of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 200,000,000 | ||
Standby Letters of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 100,000,000 | ||
Swingline Loans [Member] | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 30,000,000 | ||
Term loan | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | 1,371,500,000 | $ 1,596,500,000 | $ 1,800,000,000 |
Term loan | Maximum | |||
Debt Instrument [Line Items] | |||
Term loan, outstanding principal amount | $ 150,000,000 | ||
Term loan | Eurodollar Borrowings | |||
Debt Instrument [Line Items] | |||
Basis spread | 450.00% | ||
Term loan | Alternative Base Rate Borrowings | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread | 100.00% | ||
Applicable margin above base rate | 350.00% | ||
Term loan | Alternative Base Rate Borrowings | Federal funds rate | |||
Debt Instrument [Line Items] | |||
Basis spread | 50.00% |
Debt (Term Loan) (Details) |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Nov. 03, 2018
USD ($)
|
Aug. 04, 2018
USD ($)
|
Jul. 29, 2017
USD ($)
|
Jul. 30, 2016
USD ($)
|
Aug. 21, 2015
USD ($)
|
|
Debt Instrument [Line Items] | |||||
(Loss) Gain on extinguishment of debt | $ 5,000,000 | $ 0 | $ (800,000) | ||
Term loan | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | 1,371,500,000 | $ 1,596,500,000 | $ 1,800,000,000 | ||
Mandatory quarterly repayments in calendar 2016 and thereafter | 4,500,000 | ||||
Payment to be paid subsequent to current fiscal year | 22,500,000 | ||||
Remaining balloon payment required at maturity | 1,200,000,000 | ||||
Repayments of debt | $ 225,000,000 | ||||
Repayments of Debt, future | 180,000,000 | ||||
Threshold for repayment, net proceeds of asset dispositions and certain casualty events | $ 25,000,000 | ||||
Debt interest rate, percentage | 6.30% | ||||
Debt repurchased amount | 72,000,000 | ||||
Debt repurchase cost | 68,400,000 | ||||
Gains on repurchase of debt | 800,000 | ||||
Write-off of unamortized discount and debt issuance costs | $ 2,800,000 | ||||
ANN | Term loan | |||||
Debt Instrument [Line Items] | |||||
Debt discount percentage | 2.00% | ||||
Additional term facility borrowing capacity | $ 200,000,000 | ||||
Eurodollar Borrowings | Term loan | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 450.00% | ||||
Debt interest rate, percentage | 0.00% | ||||
Eurodollar Borrowings | LIBOR | Term loan | |||||
Debt Instrument [Line Items] | |||||
Base rate floor | 75.00% | ||||
Alternative Base Rate Borrowings | Term loan | |||||
Debt Instrument [Line Items] | |||||
Base rate floor | 175.00% | ||||
Alternative Base Rate Borrowings | Federal funds rate | Term loan | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 50.00% | ||||
Alternative Base Rate Borrowings | LIBOR | Term loan | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 100.00% | ||||
Applicable margin above base rate | 350.00% | ||||
Subsequent Event [Member] | Term loan | |||||
Debt Instrument [Line Items] | |||||
Repayments of Debt, future | 22,500,000 |
Debt (Restrictions Under the Term Loan and the Amended Revolving Credit Agreement) (Details) - Revolving Credit Facility $ in Millions |
12 Months Ended |
---|---|
Aug. 04, 2018
USD ($)
| |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Percentage of Credit Limit | 10.00% |
Line of Credit Facility, Covenant Terms, Remaining Borrowing Capacity | $ 37.5 |
Minimum | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Fixed Charge Coverage Ratio | 1.00 |
Debt Instrument, Covenant, Days of Availability | 3 days |
Debt instrument, restricted payment term, availability as percentage of aggregate commitment | 20.00% |
Maximum | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Days of Availability | 30 days |
Debt (Maturities of Debt) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
|
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2019 | $ 0.0 | |
2020 | 0.0 | |
2021 | 66.5 | |
2022 | 90.0 | |
2023 | 1,215.0 | |
Total maturities | 1,371.5 | |
Term loan | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
Total maturities | 1,333.0 | $ 1,542.5 |
Repayments of debt | $ 225.0 |
Fair Value Measurements (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018
USD ($)
Store
|
Jul. 29, 2017
USD ($)
Store
|
Jul. 30, 2016
USD ($)
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt | $ 1,371.5 | ||
Store-related assets | $ 65.0 | $ 38.4 | |
Number of impaired stores | Store | 327 | 120 | |
Assets, Fair Value Disclosure, Nonrecurring | $ 15.8 | $ 2.8 | |
Impairment of tangible assets | 49.2 | 35.6 | $ 13.3 |
Term loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt | 1,333.0 | 1,542.5 | |
Term loan | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt | $ 1,258.0 | $ 1,345.0 | |
Change for Growth Program [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of impaired stores | Store | 105 | 130 | |
Number of impaired office buildings | Store | 1 |
Income Taxes (Domestic and Foreign Pretax Income) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Domestic and Foreign Income [Line Items] | |||
Total loss before (benefit) provision for income taxes | $ (81.5) | $ (1,414.2) | $ (8.3) |
Domestic | |||
Domestic and Foreign Income [Line Items] | |||
Total loss before (benefit) provision for income taxes | (115.1) | (1,451.0) | (56.0) |
Foreign | |||
Domestic and Foreign Income [Line Items] | |||
Total loss before (benefit) provision for income taxes | $ 33.6 | $ 36.8 | $ 47.7 |
Income Taxes (Provisions (Benefits) from Continuing Operations for Current and Deferred Income Taxes) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Current: | |||
Federal | $ (1.3) | $ 6.9 | $ 7.7 |
State and local | 1.1 | 12.6 | 10.2 |
Foreign | 5.5 | 4.9 | 12.5 |
Current income tax expense, total | 5.3 | 24.4 | 30.4 |
Deferred: | |||
Federal | (79.5) | (308.3) | (21.7) |
State and local | 32.0 | (64.8) | (3.2) |
Foreign | 0.4 | 1.8 | (1.9) |
Total deferred income tax expense (benefit), total | (47.1) | (371.3) | (26.8) |
Total (benefit) provision for income taxes | $ (41.8) | $ (346.9) | $ 3.6 |
Income Taxes (Tax Cuts and Jobs Act) (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Tax Cuts and Jobs Act, NOLS annual limitation, pecentage | 80.00% | |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Federal | $ 24,600,000 | |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), State | 700,000 | |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Executive compensation limitation | 1,300,000 | |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Indefinite reinvestment assertion | 46,800,000.0 | |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Tax reform impact | $ 48,500,000.0 | |
Tax Cuts and Jobs Act, Tax Rate, Federal | 21.00% | |
Tax Cuts and Jobs Act, Blended Tax Rate | 27.00% | |
Tax Cuts and Jobs Act, Incomplete Accounting, Net Federal Transition Tax Liability | $ 3,800,000 | |
Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Income Tax Benefit (Expense), Federal | 28,300,000 | |
Tax Cuts and Jobs Act, Incomplete Accounting, Transition tax payment | 300,000 | |
Tax Cuts and Jobs Act, Executive Compensation Deduction Limitation | 1,000,000 | |
Tax Cuts and Jobs Act, Deferred Tax Liability, estimate | 400,000 | |
Tax Cuts and Jobs Act, Deferred Tax Liability, estimate, prior | $ 47,200,000 | |
Tax Cuts and Jobs Act, GILTI, US shareholder's pro rata share of CFC, percentage | 10.00% | |
Effective Income Tax Rate Reconciliation, Percent | 51.30% | |
Deferred Tax Assets, Net of Valuation Allowance | $ 21,800,000 | |
Deferred Tax Assets, Valuation Allowance | 54,300,000 | $ 16,900,000 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 37,400,000 | |
Deferred Tax Assets, Valuation Allowance, Current | 12,100,000 | |
Deferred Tax Asset, Valuation Allowance, Reduction of US Federal Corporate Tax Rate | 3,500,000 | |
Deferred Tax Asset, Valuation Allowance, Expiration of Capital Loss Carryover | $ 1,300,000 |
Income Taxes (Tax Rate Reconciliation) (Details) - USD ($) $ in Millions |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
||||||
Income Tax Disclosure [Abstract] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||||||
Tax Cuts and Jobs Act, Tax Rate, Federal | 21.00% | |||||||
Tax Cuts and Jobs Act, Blended Tax Rate | 27.00% | |||||||
Impairment of goodwill | $ 0.0 | $ 596.3 | $ 0.0 | |||||
Tax deductible goodwill impairment charge | 69.8 | |||||||
Non-tax deductible goodwill impairment charge | 526.5 | |||||||
Increase (decrease) due to: | ||||||||
Benefit for income taxes at the U.S. federal statutory rate (a) | [1] | (21.9) | (495.0) | (2.9) | ||||
State and local income taxes, net of federal benefit | 1.0 | (39.7) | 2.4 | |||||
Foreign Income Tax Rate Differential | (1.7) | 0.0 | 0.0 | |||||
Tax Cuts and Job Act | (48.5) | 0.0 | 0.0 | |||||
State DTA valuation allowance | 21.8 | 0.0 | 0.0 | |||||
Share-based Compensation Cost | [2] | 5.4 | 0.0 | 0.0 | ||||
Goodwill impairment | 0.0 | 184.3 | 0.0 | |||||
Net change relating to uncertain income tax benefits | (0.7) | 3.2 | 3.3 | |||||
Indefinitely reinvested foreign earnings | 0.0 | 0.0 | 0.1 | |||||
Other – net | 2.8 | 0.3 | 0.7 | |||||
Total (benefit) provision for income taxes | $ (41.8) | $ (346.9) | $ 3.6 | |||||
|
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Income Taxes [Line Items] | |||
U.S. federal statutory income tax rate | 35.00% | ||
Total tax credits expected to receive | $ 39.5 | ||
Tax credits received | 4.3 | $ 6.1 | $ 2.9 |
Estimated decrease in unrecognized tax benefits, over the next twelve months | 4.8 | ||
Gross unrecognized tax benefits that would affect effective tax rate, including interest and penalties | 46.0 | ||
State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | 389.3 | ||
State and Local Jurisdiction | Period of Expiration One to Five | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | 29.9 | ||
State and Local Jurisdiction | Period of Expiration Six To Ten | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | 28.0 | ||
State and Local Jurisdiction | Period of Expiration Eleven to Fifteen | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | 54.8 | ||
State and Local Jurisdiction | Period of Expiration Sixteen to Twenty | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | $ 276.6 | ||
Internal Revenue Service (IRS) | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 20 years | ||
Operating Loss Carryforwards | $ 98.0 | ||
Federal Jurisdiction | Period Of Expiration Nineteen Years [Member] | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | 48.8 | ||
Federal Jurisdiction | Period Of Expiration Twenty Years [Member] | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | 32.5 | ||
Federal Jurisdiction | Period Of Expiration Indefinite [Member] | |||
Income Taxes [Line Items] | |||
Operating Loss Carryforwards | $ 16.7 | ||
Minimum | |||
Income Taxes [Line Items] | |||
Period to recognize tax incentives | 10 years | ||
Minimum | State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 5 years | ||
Minimum | State and Local Jurisdiction | Period of Expiration One to Five | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 1 year | ||
Minimum | State and Local Jurisdiction | Period of Expiration Six To Ten | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 6 years | ||
Minimum | State and Local Jurisdiction | Period of Expiration Eleven to Fifteen | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 11 years | ||
Minimum | State and Local Jurisdiction | Period of Expiration Sixteen to Twenty | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 16 years | ||
Maximum | |||
Income Taxes [Line Items] | |||
Period to recognize tax incentives | 15 years | ||
Maximum | State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 20 years | ||
Maximum | State and Local Jurisdiction | Period of Expiration One to Five | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 5 years | ||
Maximum | State and Local Jurisdiction | Period of Expiration Six To Ten | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 10 years | ||
Maximum | State and Local Jurisdiction | Period of Expiration Eleven to Fifteen | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 15 years | ||
Maximum | State and Local Jurisdiction | Period of Expiration Sixteen to Twenty | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards expiration period | 20 years | ||
Other non-current liabilities | |||
Income Taxes [Line Items] | |||
Unrecognized tax benefits (including accrued interest and penalties) | $ 69.4 | $ 61.1 |
Income Taxes (Significant Components of Net Deferred Tax Assets (Liabilities)) (Details) - USD ($) $ in Millions |
Aug. 04, 2018 |
Jul. 29, 2017 |
|||
---|---|---|---|---|---|
Deferred tax assets (a): | |||||
Inventories | [1] | $ 23.0 | $ 35.6 | ||
Net operating loss carryforwards and tax credits | [1] | 65.4 | 66.6 | ||
Accrued payroll and benefits | [1] | 45.4 | 83.1 | ||
Share-based compensation | [1] | 17.6 | 25.0 | ||
Straight-line rent | [1] | 46.2 | 62.2 | ||
Federal benefit of uncertain tax positions | [1] | 23.6 | 20.6 | ||
Gift Cards and Merchandise Credits | [1] | 10.4 | 16.8 | ||
Other | [1] | 11.2 | 23.2 | ||
Total deferred tax assets | [1] | 242.8 | 333.1 | ||
Deferred tax liabilities: | |||||
Depreciation | 60.1 | 125.0 | |||
Amortization | 130.6 | 197.7 | |||
Foreign unremitted earnings | 0.4 | 47.1 | |||
Other | 23.5 | 21.7 | |||
Total deferred tax liabilities | 214.6 | 391.5 | |||
Valuation allowance | (54.3) | (16.9) | |||
Net deferred tax liabilities | (26.1) | (75.3) | |||
Other Assets | |||||
Income Taxes [Line Items] | |||||
Deferred Tax Assets, Net | $ 3.5 | $ 4.0 | |||
|
Income Taxes (Reconciliation of Beginning and Ending amounts of Unrecognized Tax Benefits, Excluding Interest and Penalties) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefit beginning balance | $ 45.3 | $ 43.2 | $ 34.1 |
Additions related to the ANN Acquisition | 0.0 | 0.0 | 9.6 |
Additions related to current period tax positions | 0.0 | 2.0 | 2.2 |
Additions related to tax positions in prior years | 9.8 | 1.9 | 1.0 |
Reductions related to prior period tax positions | (0.5) | (0.2) | (3.0) |
Reductions related to settlements with taxing authorities | (1.3) | (0.1) | 0.0 |
Reductions related to expiration of statute of limitations | (2.4) | (1.5) | (0.7) |
Unrecognized tax benefit ending balance | $ 50.9 | $ 45.3 | $ 43.2 |
Income Taxes (Reconciliation of Beginning and Ending Amounts of Accrued Interest and Penalties Related to Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Accrued interest and penalties beginning balance | $ 19.4 | $ 17.2 | $ 11.5 |
Additions related to the ANN Acquisition | 0.0 | 0.0 | 4.3 |
Additions (reductions) charged to expense, net | 2.7 | 2.2 | 1.4 |
Accrued interest and penalties ending balance | $ 22.1 | $ 19.4 | $ 17.2 |
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Oct. 29, 2016 |
Jan. 23, 2016 |
Aug. 04, 2018 |
Jul. 25, 2015 |
|
Commitments and Contingencies [Line Items] | ||||
Period prior to shipment date to cancel commitments (in days) | 30 days | |||
Outstanding letter of credit | $ 27.1 | |||
Sales discounts, goods (percent | 40.00% | |||
Litigation Settlement, Amount Awarded to Other Party | $ 3.5 | $ 51.0 | ||
Payments for Legal Settlements | $ 51.0 | |||
Legal reserve | $ 3.5 | |||
Minimum | ||||
Commitments and Contingencies [Line Items] | ||||
Period of preliminary commitments made in advance of planned receipt (in months) | 5 months | |||
Maximum | ||||
Commitments and Contingencies [Line Items] | ||||
Period of preliminary commitments made in advance of planned receipt (in months) | 7 months |
Commitments and Contingencies (Summary of Occupancy Costs) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Base rentals | $ 577.3 | $ 611.1 | $ 608.1 |
Percentage rentals | 33.2 | 27.4 | 33.7 |
Other occupancy costs, primarily CAM and real estate taxes | 231.9 | 225.0 | 210.5 |
Total | $ 842.4 | $ 863.5 | $ 852.3 |
Commitments and Contingencies (Schedule of Future Minimum Rentals Under Non-Cancelable Operating Leases) (Details) $ in Millions |
Aug. 04, 2018
USD ($)
|
[1],[2] | ||||
---|---|---|---|---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||||||
2019 | $ 554.4 | |||||
2020 | 482.1 | |||||
2021 | 413.2 | |||||
2022 | 336.7 | |||||
2023 | 284.5 | |||||
Thereafter | 661.0 | |||||
Total future minimum rentals | $ 2,731.9 | |||||
|
Equity (Narrative) (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
Dec. 31, 2015 |
|
Class of Stock [Line Items] | ||||
Number of common shares authorized | 360,000,000 | |||
Number of preferred shares authorized | 100,000 | |||
Number of preferred shares issued | 0 | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 24,100,000 | 19,500,000 | 17,100,000 | |
Stock Repurchase Program 2016 | ||||
Class of Stock [Line Items] | ||||
Share repurchase program authorized amount | $ 200,000,000 | |||
Stock repurchase program remaining authorized repurchase amount | $ 181,400,000 | |||
Number of common shares repurchased | 2,100,000 | |||
Value of common shares repurchased | $ 18,600,000 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Amount of repurchases in excess, subject to certain restrictions | $ 100,000,000 |
Equity (Weighted-Average Common Shares Outstanding) (Details) - shares shares in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|||
Equity [Abstract] | |||||
Basic (in shares) | 196.0 | 194.8 | 192.2 | ||
Weighted Average Number Diluted Shares Outstanding Adjustment | [1] | 0.0 | 0.0 | 0.0 | |
Diluted shares (in shares) | 196.0 | 194.8 | 192.2 | ||
|
Stock-Based Compensation (Narrative) (Details) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Aug. 04, 2018
USD ($)
shares
|
Jul. 29, 2017
USD ($)
|
Jul. 30, 2016
USD ($)
|
Dec. 10, 2015
shares
|
|
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vesting period | 4 years | |||
Total unrecognized compensation costs related to non-vested option | $ | $ 10.5 | |||
Weighted-average period expected to be recognized over (years) | 1 year 2 months 30 days | |||
Total intrinsic value of options exercised | $ | $ 7.3 | |||
Options vested period (shares) | $ | $ 11.2 | $ 13.4 | $ 13.7 | |
Employee Stock Option | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vesting period | 3 years | |||
Stock options expiration period | 7 years | |||
Employee Stock Option | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vesting period | 5 years | |||
Stock options expiration period | 10 years | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issuable per vesting of one restricted stock or unit | shares | 2.3 | |||
Service Based Restricted Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vesting period | 3 years | |||
Service Based Restricted Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vesting period | 4 years | |||
Omnibus Incentive Plan 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate number of share that may be issued under Stock Incentive Plan | shares | 70,500,000 | |||
Shares available for future grants under stock incentive plan | shares | 9,700,000 |
Stock-Based Compensation (Summary of Total Compensation Expense and Associated Income Tax Benefit) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Compensation expense | $ 19.8 | $ 24.5 | $ 26.2 |
Income tax benefit | $ (5.3) | $ (9.3) | $ (10.1) |
Stock Based Compensation (Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected term (years) | 5 years 1 month | 5 years 1 month | 5 years 1 month |
Expected volatility | 43.90% | 37.60% | 35.40% |
Risk-free interest rate | 2.00% | 1.30% | 1.50% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average grant date fair value (in dollars per shares) | $ 0.98 | $ 1.87 | $ 4.14 |
Stock-Based Compensation (Summary of Stock Option Activity Under All Plans) (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
||||||
Number of Shares | |||||||
Number of Shares, Options outstanding - Beginning | 16,413,700 | ||||||
Number of Shares, Granted | 5,892,100 | ||||||
Number of Shares, Exercised | 0 | ||||||
Number of Shares, Cancelled/Forfeited | (2,997,900) | ||||||
Number of Shares, Options outstanding - Ending | 19,307,900 | 16,413,700 | |||||
Number of Shares, Options vested and expected to vest at year-end | [1] | 19,032,300 | |||||
Number of Shares, Options exercisable at year-end | 9,995,900 | ||||||
Weighted-Average Exercise Price | |||||||
Weighted-Average Exercise Price, Options outstanding - Beginning (in dollars per share) | $ 11.42 | ||||||
Weighted-Average Exercise Price, Granted (in dollars per share) | 2.37 | ||||||
Weighted-Average Exercise Price, Exercised (in dollars per share) | 0.00 | ||||||
Weighted-Average Exercise Price, Cancelled/Forfeited (in dollars per share) | 9.36 | ||||||
Weighted-Average Exercise Price, Options outstanding - Ending (in dollars per share) | 8.97 | $ 11.42 | |||||
Weighted-Average Exercise Price, Options vested and expected to vest at year-end (in dollars per share) | [1] | 9.05 | |||||
Weighted-Average Exercise Price, Options exercisable at year-end (in dollars per share) | $ 13.09 | ||||||
Weighted-Average Remaining Contractual Terms (years) | |||||||
Weighted-Average Remaining Contractual Terms (years), Options outstanding | 4 years 2 months | 4 years 5 months 13 days | |||||
Weighted-Average Remaining Contractual Terms (years), Options vested and expected to vest at year-end | [1] | 4 years 3 months | |||||
Weighted-Average Remaining Contractual Terms (years), Options exercisable at year-end | 3 years | ||||||
Aggregate Intrinsic Value | |||||||
Aggregate Intrinsic Value, Options outstanding | [2] | $ 9.3 | $ 0.2 | ||||
Aggregate Intrinsic Value, Options vested and expected to vest at year-end | [1],[2] | 9.0 | |||||
Aggregate Intrinsic Value, Options exercisable at year-end | [2] | $ 0.1 | |||||
|
Stock-Based Compensation (Summary of Restricted Equity Awards Activity) (Details) - Service-based Restricted Equity Awards - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 7.0 | ||
Weighted-average period expected to be recognized over (years) | 1 year 7 months 25 days | ||
Number of shares | |||
Nonvested Number of shares at beginning of the year | 3,110,000 | ||
Granted (in shares) | 2,617,000 | ||
Vested (in shares) | (1,215,400) | ||
Canceled/Forfeited (in shares) | (340,300) | ||
Nonvested Number of shares at the end of the year | 4,171,300 | 3,110,000 | |
Weighted Average Grant Date Fair Value Per Share | |||
Nonvested Weighted-Average Grant Date Fair Value at the beginning of the year (in dollars per share) | $ 8.05 | ||
Granted (in dollars per share) | 2.45 | $ 5.28 | $ 12.72 |
Vested (in dollars per share) | 8.27 | ||
Canceled/Forfeited (in dollars per share) | 6.83 | ||
Nonvested Weighted-Average Grant Date Fair Value at the end of the year (in dollars per share) | $ 4.57 | $ 8.05 | |
Total fair value of awards vested | $ 2.8 | $ 3.9 | $ 4.9 |
Employee Benefit Plans (Narrative) (Details) |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018
USD ($)
fund
shares
|
Jul. 29, 2017
USD ($)
|
Jul. 30, 2016
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss on a defined benefit pension plan, tax | $ 400,000 | $ 2,500,000 | |
Retirement Savings Plan (401 (k)) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses related to contributions and administration of plans | $ 15,800,000 | 17,100,000 | 18,000,000 |
Retirement Savings Plan (401 (k)) | First 3% | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent match | 100.00% | ||
Employee contribution percentage | 3.00% | ||
Retirement Savings Plan (401 (k)) | Next 2% | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent match | 50.00% | ||
Employee contribution percentage | 2.00% | ||
Executive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, liabilities recognized | $ 71,600,000 | 71,100,000 | |
Employer matching contribution, percent match | 100.00% | ||
Expenses related to contributions and administration of plans | $ 6,700,000 | 8,600,000 | 1,400,000 |
Employee contribution of base salary and bonus | 50.00% | ||
Maximum bonus contribution per employee | 75.00% | ||
Percentage of base salary and bonus salary deferred per employee | 1.00% | ||
Threshold for bonus salary deferral match on first 1% | $ 270,000 | ||
Additional matching contribution of first 5% to ERP Plan | 100.00% | ||
Percentage of base salary and bonus salary deferred per employee for additional employer matching | 5.00% | ||
Threshold for bonus salary deferral match on first 5% | $ 270,000 | ||
Incremental vesting period | 5 years | ||
Vesting percentage | 100.00% | ||
Amount of matching contributions | $ 1,000,000 | 900,000 | 1,900,000 |
Number reference investment fund elections offered to participating employees | fund | 27 | ||
Cash Settled LTIP Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Unrecognized compensation cost | $ 28,400,000 | ||
Weighted-average period expected to be recognized over (years) | 1 year 10 months 10 days | ||
Defined contribution plan, liabilities recognized | $ 14,900,000 | ||
Deferred Compensation Arrangements, Cash Settlement | 10,400,000 | ||
Employee Stock Purchase Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employee share purchase during each quarterly offering period, discount | 15.00% | ||
Common Stock, Shares Available for Issuance, Share Increase | shares | 4,000,000 | ||
Selling, general and administrative expenses | Cash Settled LTIP Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Compensation expense | $ (7,500,000) | 14,100,000 | 20,100,000 |
Accrued expenses and other current liabilities | Executive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, liabilities recognized | 4,200,000 | 8,100,000 | |
Other non-current liabilities | Executive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, liabilities recognized | $ 67,400,000 | 63,000,000 | |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Loss on a defined benefit plan, net of tax | 7,400,000 | ||
Net actuarial loss on a defined benefit pension plan, tax | 2,900,000 | ||
Defined Benefit Plan, Other Cost (Credit) | $ 8,000,000 | ||
Pension Plan | ANN | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amount of accumulated benefit obligation exceeded the plan's assets | $ 12,000,000 |
Segments (Net Sales and Operating Income) (Details) - USD ($) $ in Millions |
12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total net sales | $ 6,578.3 | $ 6,649.8 | $ 6,995.4 | |||||||||||||||||||||
Total operating income (loss) | 34.3 | (1,313.8) | 93.8 | |||||||||||||||||||||
Acquisition and integration expenses | (5.4) | (39.4) | (77.4) | |||||||||||||||||||||
Restructuring Charges | [1] | (78.5) | (81.9) | 0.0 | ||||||||||||||||||||
Impairment of goodwill | 0.0 | (596.3) | 0.0 | |||||||||||||||||||||
Impairment of other intangible assets | 0.0 | (728.1) | 0.0 | |||||||||||||||||||||
Total impairment charges | 34.0 | [2] | 21.6 | [2] | 13.3 | |||||||||||||||||||
Restructuring Costs and Asset Impairment Charges | 78.5 | 81.9 | ||||||||||||||||||||||
Premium Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Impairment of goodwill | 0.0 | (428.9) | [3] | |||||||||||||||||||||
Total impairment charges | 2.3 | [2] | 0.7 | [2] | 0.0 | |||||||||||||||||||
Value Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Impairment of goodwill | 0.0 | (107.2) | [3] | |||||||||||||||||||||
Total impairment charges | 24.8 | [2] | 11.1 | [2] | 8.1 | |||||||||||||||||||
Plus Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Impairment of goodwill | 0.0 | (60.2) | [4] | |||||||||||||||||||||
Total impairment charges | 5.1 | [2] | 6.3 | [2] | 2.8 | |||||||||||||||||||
Kids Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Impairment of goodwill | 0.0 | 0.0 | ||||||||||||||||||||||
Total impairment charges | 1.8 | [2] | 3.5 | [2] | 2.4 | |||||||||||||||||||
Operating Segments | Premium Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total net sales | [5] | 2,317.8 | 2,322.6 | 2,330.9 | ||||||||||||||||||||
Total operating income (loss) | [5],[6] | 135.2 | 140.9 | 13.3 | ||||||||||||||||||||
Operating Segments | Value Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total net sales | 1,820.5 | 1,950.2 | 2,094.6 | |||||||||||||||||||||
Total operating income (loss) | (83.2) | 12.2 | 92.0 | |||||||||||||||||||||
Operating Segments | Plus Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total net sales | 1,340.0 | 1,353.9 | 1,463.6 | |||||||||||||||||||||
Total operating income (loss) | 27.1 | 15.5 | 36.9 | |||||||||||||||||||||
Operating Segments | Kids Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total net sales | 1,100.0 | 1,023.1 | 1,106.3 | |||||||||||||||||||||
Total operating income (loss) | 39.1 | (36.7) | 29.0 | |||||||||||||||||||||
Cash-related restructuring charges [Member] | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Severance Costs | [7] | 5.2 | 34.5 | |||||||||||||||||||||
Professional Fees | [7] | 59.2 | 33.4 | |||||||||||||||||||||
Restructuring Charges | [7] | (64.4) | (67.9) | |||||||||||||||||||||
Cash-related restructuring charges [Member] | Operating Segments | Premium Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Severance Costs | [7] | 1.3 | 3.0 | |||||||||||||||||||||
Cash-related restructuring charges [Member] | Operating Segments | Value Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Severance Costs | [7] | (1.3) | 8.2 | |||||||||||||||||||||
Cash-related restructuring charges [Member] | Operating Segments | Plus Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Severance Costs | [7] | 3.2 | 10.6 | |||||||||||||||||||||
Professional Fees | [7] | 2.2 | 0.0 | |||||||||||||||||||||
Cash-related restructuring charges [Member] | Operating Segments | Kids Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Severance Costs | [7] | 0.2 | 2.4 | |||||||||||||||||||||
Cash-related restructuring charges [Member] | Corporate, Non-Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Severance Costs | [7] | 1.8 | 10.3 | |||||||||||||||||||||
Professional Fees | [7] | 57.0 | 33.4 | |||||||||||||||||||||
Non-cash charges [Member] | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Restructuring Charges | (14.1) | (14.0) | ||||||||||||||||||||||
Change for Growth Program [Member] | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Restructuring Charges | (78.5) | (81.9) | ||||||||||||||||||||||
Change for Growth Program [Member] | Plus Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total impairment charges | 15.2 | |||||||||||||||||||||||
Change for Growth Program [Member] | Cash-related restructuring charges [Member] | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Severance Costs | [8] | 5.2 | 33.2 | |||||||||||||||||||||
Restructuring Charges | (64.4) | (67.9) | ||||||||||||||||||||||
Change for Growth Program [Member] | Non-cash charges [Member] | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Restructuring Charges | (14.1) | (14.0) | ||||||||||||||||||||||
Total impairment charges | [9] | 14.1 | 14.0 | |||||||||||||||||||||
Change for Growth Program [Member] | Non-cash charges [Member] | Premium Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total impairment charges | 6.5 | 3.2 | ||||||||||||||||||||||
Change for Growth Program [Member] | Non-cash charges [Member] | Value Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total impairment charges | 3.0 | 4.4 | ||||||||||||||||||||||
Change for Growth Program [Member] | Non-cash charges [Member] | Plus Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total impairment charges | 4.4 | 4.8 | ||||||||||||||||||||||
Change for Growth Program [Member] | Non-cash charges [Member] | Kids Fashion | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Total impairment charges | $ 0.2 | $ 1.6 | ||||||||||||||||||||||
ANN | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Purchase accounting adjustments | $ 126.9 | |||||||||||||||||||||||
|
Segments (Depreciation and Amortization Expense and Capital Expenditures) (Details) - USD ($) $ in Millions |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
||||||
Segment Reporting Information [Line Items] | ||||||||
Depreciation and amortization expense | $ 355.5 | $ 384.9 | $ 358.7 | |||||
Total capital expenditures | 186.3 | 258.1 | 366.5 | |||||
Operating Segments | Premium Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Depreciation and amortization expense | [1] | 127.7 | 134.2 | 128.0 | ||||
Total capital expenditures | [1] | 40.7 | 64.2 | 57.0 | ||||
Operating Segments | Value Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Depreciation and amortization expense | 104.3 | 111.2 | 106.5 | |||||
Total capital expenditures | 12.4 | 35.6 | 90.6 | |||||
Operating Segments | Plus Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Depreciation and amortization expense | 62.4 | 68.4 | 52.1 | |||||
Total capital expenditures | 8.8 | 21.2 | 40.9 | |||||
Operating Segments | Kids Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Depreciation and amortization expense | 61.1 | 71.1 | 72.1 | |||||
Total capital expenditures | 6.1 | 17.9 | 19.8 | |||||
Corporate, Non-Segment | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total capital expenditures | [2] | $ 118.3 | $ 119.2 | $ 158.2 | ||||
|
Segments Revenue from external customers by products (Details) |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Revenue from External Customer [Line Items] | |||
Percentage of Total Net Sales | 100.00% | 100.00% | 100.00% |
Apparel | |||
Revenue from External Customer [Line Items] | |||
Percentage of Total Net Sales | 84.00% | 85.00% | 87.00% |
Accessories and other | |||
Revenue from External Customer [Line Items] | |||
Percentage of Total Net Sales | 16.00% | 15.00% | 13.00% |
Additional Financial Information (Cash Interest and Taxes) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash paid for interest | $ 112.9 | $ 90.8 | $ 76.3 |
Cash paid (received) for income taxes | $ 5.1 | $ 3.5 | $ 9.2 |
Additional Financial Information (Narrative) (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Aug. 21, 2015 |
Aug. 04, 2018 |
Jul. 29, 2017 |
Jul. 30, 2016 |
|
Business Acquisition [Line Items] | ||||
Common stock issued related to acquisition, value | $ 344.9 | |||
Accrued capital expenditures | $ 21.4 | $ 26.6 | $ 61.9 | |
ANN | ||||
Business Acquisition [Line Items] | ||||
Common stock issued related to acquisition, shares | 31.2 | |||
Common stock issued related to acquisition, value | $ 345.0 |
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