Impairment and Other Charges

6 Months Ended

Jul. 31, 2021

Impairment and Other Charges [Abstract]

Impairment and Other Charges

4. Impairment and Other Charges

	Thirteen weeks ended				Twenty-six weeks ended
	July 31,		August 1,		July 31,		August 1,
($ in millions)	2021		2020		2021		2020
Impairment of long-lived assets and right-of-use assets	$	39	$	—	$	39	$	15
Lease termination costs		4		—		4		—
Impairment of investments		—		—		2		—
Reorganization costs		—		3		2		3
(Insurance recovery)/ losses related to social unrest		(7)		18		(7)		18
Runners Point shut down		—		16		—		16
Pension litigation related charges		—		1		—		2
Total impairment and other charges	$	36	$	38	$	40	$	54

During the thirteen weeks ended July 31, 2021, we conducted an impairment review of certain Footaction stores as a result of the Company’s decision to convert many of the stores to other existing banner concepts and close the remaining stores, either through natural lease expiration or early termination. We evaluated the long-lived assets, including the right-of-use assets and recorded non-cash charges of $39 million to write down store fixtures, leasehold improvements, and right-of-use assets for approximately 60 locations. Additionally, we recorded charges of $4 million primarily in other lease-related termination costs.

Partially offsetting these charges was $11 million of additional insurance recovery related to the prior year social unrest losses of $18 million. We recorded $7 million of the insurance recovery within impairment and other charges as it relates to the book value of losses recorded in 2020, with $4 million recorded in other income. We are continuing to work with our insurers to determine if additional incurred losses under our property insurance policy will be covered; however, we do not expect that future recoveries will be significant.

During the first quarter of 2021, we recorded an impairment charge of $2 million related to the underperformance of one of our minority investments. Additionally, in connection with the reorganization of certain support functions, we recorded severance charges of $2 million.

Due to the COVID-19 pandemic and its effect on our actual and projected results, during the first quarter of 2020 we determined that a triggering event occurred for certain underperforming stores operating in Europe and, therefore, we conducted an impairment review. We evaluated the long-lived assets, including the right-of-use assets, of 70 stores and recorded non-cash charges of $15 million to write down store fixtures, leasehold improvements, and right-of-use assets.

In May 2020, we made the strategic decision to shut down our Runners Point business and to consolidate our Sidestep support staff into our other operations in Europe. Also, as part of the next phase of the Champs Sports and Eastbay strategic initiative, we restructured positions and aligned several functions across the banners and planned to consolidate certain Eastbay operations from Wausau, Wisconsin into the Champs Sports headquarters in Bradenton, Florida. We recorded charges of $16 million related to the shutdown of the Runners Point business and $3 million related to the reorganization associated with Eastbay.

We recorded charges of $1 million and $2 million for the thirteen and twenty-six weeks ended August 1, 2020, respectively, related to administrative expenses in connection with the pension plan reformation.