Store Closing and Other Operating Charges Restructuing (Notes)

12 Months Ended

Jan. 28, 2017

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Store Closing and Other Operating Charges

In May 2016, the Company announced measures to better align talent and financial resources against its most important priorities; these measures include (i) focusing each brand on geographies with the greatest potential and (ii) streamlining the Company’s operating model. The measures resulted in the closure of its fleet of 53 Old Navy stores in Japan, the closure of select international stores, primarily for Banana Republic in Europe, and the creation of a more efficient global brand structure. Including the Old Navy closures in Japan, the Company closed 67 stores in total related to these measures in fiscal 2016.

In connection with the decision to close stores and streamline the Company's operations, the Company incurred $197 million in restructuring costs, on a pre-tax basis, during fiscal 2016. The measures were substantially completed in fiscal 2016 and the summary of the costs incurred are as follows:

($ in millions)	Costs Incurred in Fiscal 2016
Costs recorded in cost of goods sold and occupancy expenses:
Accelerated depreciation, net of reversal of depreciation expense related to asset retirement obligations	$	(9	)
Employee related costs	14
Accelerated recognition of deferred rent	(8		)
Other	3
Total costs recorded in cost of goods sold and occupancy expenses	—
Costs recorded in operating expenses:
Lease termination fees and lease losses	77
Employee related costs	50
Store asset impairment	54
Other	16
Total costs recorded in operating expenses	197
Total restructuring costs	$	197

In addition to the total pre-tax amount incurred above, there was an unfavorable tax impact related to the restructuring costs incurred in certain foreign subsidiaries for which the Company was not able to recognize any tax benefit.

The following table summarizes activities related to certain restructuring costs that will be settled with cash payments and the related liability balances as of January 28, 2017:

($ in millions)	Lease Termination Fees and Lease Losses			Employee Related Costs			Other			Total
Balance at January 30, 2016	$	—		$	—		$	—		$	—
Provision	80			69			22			171
Adjustments	(3		)	(5		)	—			(8		)
Settlements through existing lease deposits	(10		)	—			—			(10		)
Cash payments	(66		)	(32		)	(18		)	(116		)
Balance at January 28, 2017	$	1		$	32		$	4		$	37

The remaining liability balances are expected to settle with cash payments during fiscal 2017.