Retail Restructuring

6 Months Ended

Jul. 31, 2020

Retail Restructuring [Abstract]

Retail Restructuring

Note 2 – Retail Restructuring

On June 5, 2020, the Company announced the restructuring of its retail operations segment including the closing of all Wilsons Leather and G.H. Bass stores. Additionally, the Company will close its Calvin Klein Performance stores. In connection with the restructuring of the retail operations segment, the Company expects to incur an aggregate charge of approximately $100 million related to store operating costs, landlord termination fees, severance costs, store liquidation and closing costs, write-offs related to right-of-use assets and legal and professional fees. The Company expects the net cash outflow from the retail restructuring to be approximately $65 million.

As a result of the restructuring of the Company’s retail operations, the Company recorded a charge of $1.2 million during the three months ended July 31, 2020. The charge consisted primarily of severance payments, benefit continuation costs and store closing costs. Restructuring charges are recorded within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income (loss). The following is a reconciliation of the accrual for the quarter ended July 31, 2020:

	Severance and Benefit Costs		Store Closing Costs		Total
	(In thousands)
Balance at April 30, 2020	$	—	$	—	$	—
Amounts charged to expense		480		792		1,272
Cash payments		(26)		—		(26)
Balance at July 31, 2020	$	454	$	792	$	1,246

The Company has accounted for the remaining rent and termination payments under Accounting Standards Codification (“ASC”) 842 – Leases. As of July 31, 2020, the total operating lease liability related to Wilsons Leather, G.H Bass, and Calvin Klein Performance stores is $54.5 million and will be paid by the end of fiscal 2021.