Restructuring

3 Months Ended

May 04, 2024

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

During the second quarter of Fiscal 2024, the Company initiated a plan to rationalize its store footprint across the Company, as well as to reorganize certain centralized functions within its North America and UK support centers (collectively, the “Plan”). During the first quarter of Fiscal 2025, as a result of the continued strategic review of the UK business, the Company expanded the Plan in order to further redesign the operating model of the UK business aimed at improving profitability, with margins in line with the rest of the business within the next three years. The store footprint reduction is expected to include the closure of up to 150 underperforming stores across both the North America and International reportable segments through the end of Fiscal 2025 and will result in costs primarily for severance and asset disposals or impairment. The reorganization of the support centers includes the elimination of certain roles resulting in expenses primarily related to severance and other employee-related costs. Actions related to the Plan are expected to be completed by the end of Fiscal 2025.

During the 13 weeks ended May 4, 2024, the Company recorded charges related to the Plan of $6.5 million, consisting of the following: $2.2 million for employee-related costs; $2.4 million for store closure costs; and $1.9 million related to asset impairments. Cumulative costs to date related to the Plan are $17.8 million, consisting of the following: $7.6 million for employee-related costs; $4.0 million for store closure costs; and $6.2 million related to asset impairments. Total estimated costs related to the Plan are expected to range from $20 million to $30 million, including $10 million to $15 million of estimated non-cash charges for asset disposals and impairments. These costs are recorded within other operating (expense) income, net in the condensed consolidated statements of operations.