Restructuring

In February 2016, the Company announced the implementation of a retail store fleet optimization and office consolidation that is intended to streamline brand operations, reduce overhead costs, create operating efficiencies and improve collaboration, and includes the closure of facilities and relocation of employees. The Company has begun to realign its brands across two groups: Fashion Lifestyle and Performance Lifestyle. The Fashion Lifestyle group will include the UGG and Koolaburra® by UGG (Koolaburra) brands. The Performance Lifestyle group will include the Teva, Sanuk and Hoka One One® (Hoka) brands. As part of this realignment, the Company also relocated its Sanuk brand operations in Irvine, California to its corporate headquarters in Goleta, California and consolidated its European offices. In addition, the Company closed its Ahnu® (Ahnu) brand operations office in Richmond, California.

The Company is in the process of evaluating its portfolio of retail stores. The Company identified 24 retail stores that are candidates for potential closure and has closed six stores during the three months ended June 30, 2016 and three stores during the three months ended March 31, 2016. Subsequent to the sales of the MOZO and TSUBO brands, in July 2015 and February 2016, respectively, neither of which were material, the operating results for the other brands segment include only Hoka, Ahnu and Koolaburra. The Company plans to leverage elements of the Ahnu brand, including particular styles, under the umbrella of the Teva brand beginning in calendar year 2017.

As a result of the restructuring, the Company has incurred charges totaling approximately $26,500 through June 30, 2016. Of the total amount, approximately $4,000 remained accrued at June 30, 2016, and is expected to be paid during fiscal year 2017. Restructuring charges are reflected in selling, general and administrative expenses and the related liability is reflected in other accrued expenses. It is anticipated that the Company will incur an additional $8,000 to $13,000 of similar restructuring costs during the remainder of fiscal year 2017. The following table summarizes these restructuring charges:



	Lease Termination Costs			Severance Costs			Leasehold Impairments			Software Impairments			Other			Total
Fiscal year 2016 charges	$	8,900		$	4,000		$	5,800		$	3,800		$	2,300		$	24,800
Paid in cash	(1,200		)	(600		)	—			—			—			(1,800		)
Non-cash	—			—			(5,800		)	(3,800		)	(500		)	(10,100		)
Liability as of March 31, 2016	7,700			3,400			—			—			1,800			12,900
Additional charges	1,200			400			100			—			—			1,700
Non-cash	—			—			(100		)	—			—			(100		)
Paid in cash	(6,700		)	(2,000		)	—			—			(1,800		)	(10,500		)
Liability as of June 30, 2016	$	2,200		$	1,800		$	—		$	—		$	—		$	4,000