Restructuring Charges

3 Months Ended

Jun. 27, 2015

Restructuring and Related Activities [Abstract]

Restructuring Charges

A description of significant restructuring activities and related costs is included below.

Fiscal 2016

Global Reorganization Plan

On May 12, 2015, the Company's Board of Directors approved a reorganization and restructuring plan comprised of the following major actions: (i) the reorganization of the Company from its current channel and regional structure to an integrated global brand-based operating structure, which will streamline the Company's business processes to better align its cost structure with its long-term growth strategy; (ii) a strategic store and shop-within-shop performance review conducted by region and brand; (iii) a targeted corporate functional area review; and (iv) the consolidation of certain of the Company's luxury lines (collectively, the "Global Reorganization Plan"). The Global Reorganization Plan will result in a reduction in workforce and, once a performance review is complete, the closure of certain stores and shop-within-shops. The Global Reorganization Plan is expected to be substantially implemented by the end of Fiscal 2016.

The Company expects to incur total estimated charges of $70 million to $100 million in connection with the Global Reorganization Plan, comprised of restructuring charges totaling $55 million to $80 million, to be settled in cash, and non-cash charges totaling $15 million to $20 million. The Company anticipates that these restructuring and non-cash charges will be incurred over the course of Fiscal 2016, primarily during the first half of the year.

A summary of the restructuring and non-cash charges recorded in connection with the Global Reorganization Plan is as follows:



	Three Months Ended
	June 27, 2015
	(millions)
Restructuring charges:
Severance and benefit costs	$	32
Lease termination and store closure costs	1
Other cash charges	1
Total restructuring charges	34
Non-cash charges:
Impairment of assets^(a)	8
Inventory-related charges^(b)	3
Total non-cash charges	11
Total restructuring and non-cash charges	$	45


^(a)	See Note 8 for additional information.


^(b)	Inventory-related charges are recorded within cost of goods sold in the unaudited interim consolidated statements of income.

A summary of the activity in the restructuring reserve related to the Global Reorganization Plan is as follows:



	Severance and Benefit Costs			Lease Termination and Store Closure Costs		Other Costs		Total
	(millions)
Balance at March 28, 2015	$	—		$	—	$	—	$	—
Additions charged to expense	32			1		1		34
Cash payments charged against reserve	(3		)	—		—		(3		)
Balance at June 27, 2015	$	29		$	1	$	1	$	31

Fiscal 2015

During Fiscal 2015, the Company recorded restructuring charges of $10 million, $4 million of which were recorded during the three months ended June 28, 2014. These charges were primarily related to severance and benefit costs associated with certain of its retail, wholesale, and corporate operations. At March 28, 2015, the restructuring reserve related to these charges was $5 million, which was reduced by payments to $3 million at June 27, 2015.