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Restructuring and Other Charges | 6 Months Ended
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Sep. 30, 2017
Restructuring and Related Activities [Abstract] |
Restructuring and Other Charges | Restructuring and Other Charges A description of significant restructuring and other activities and related costs is included below. Way Forward Plan On June 2, 2016, the Company's Board of Directors approved a restructuring plan with the objective of delivering sustainable, profitable sales growth and long-term value creation for shareholders (the "Way Forward Plan"). The Company is refocusing on its core brands and evolving its product, marketing, and shopping experience to increase desirability and relevance. It is also evolving its operating model to enable sustainable, profitable sales growth by significantly improving quality of sales, reducing supply chain lead times, improving its sourcing, and executing a disciplined multi-channel distribution and expansion strategy. As part of the Way Forward Plan, the Company is rightsizing its cost structure and implementing a return on investment-driven financial model to free up resources to invest in the brand and drive high-quality sales. The Way Forward Plan includes strengthening the Company's leadership team and creating a more nimble organization by moving from an average of nine to six layers of management. The Way Forward Plan also includes the discontinuance of the Company's Denim & Supply brand and the integration of its denim product offerings into its Polo Ralph Lauren brand. Collectively, these actions, which were substantially completed during Fiscal 2017, resulted in a reduction in workforce and the closure of certain stores and shop-within-shops. On March 30, 2017, the Company's Board of Directors approved the following additional restructuring-related activities associated with the Way Forward Plan: (i) the restructuring of its in-house global e-commerce platform which was in development and shifting to a more cost-effective, flexible e-commerce platform through a new agreement with Salesforce's Commerce Cloud, formerly known as Demandware; (ii) the closure of its Polo store at 711 Fifth Avenue in New York City; and (iii) the further streamlining of the organization and the execution of other key corporate actions in line with the Company's Way Forward Plan. Together, these actions are an important part of the Company's efforts to achieve its stated objective to return to sustainable, profitable growth and invest in the future. These additional restructuring-related activities will result in a further reduction in workforce and the closure of certain corporate office and store locations, and are expected to be substantially completed by the end of Fiscal 2018. In connection with the Way Forward Plan, the Company currently expects to incur total estimated charges of approximately $770 million, comprised of cash-related restructuring charges of approximately $450 million and non-cash charges of approximately $320 million. Cumulative cash and non-cash charges incurred since inception were $333.0 million and $290.4 million, respectively. In addition to these charges, the Company also incurred an additional non-cash charge of $155.2 million during Fiscal 2017 associated with the destruction of inventory out of current liquidation channels in line with its Way Forward Plan. A summary of the charges recorded in connection with the Way Forward Plan during the three-month and six-month periods ended September 30, 2017 and October 1, 2016, as well as the cumulative charges recorded since its inception, is as follows:
|  | Three Months Ended |  | Six Months Ended |  |
|  | September 30, 2017 |  | October 1, 2016 |  | September 30, 2017 |  | October 1, 2016 |  | Cumulative Charges
|  | (millions)
Cash-related restructuring charges: |  |  |  |  |  |  |  |  |  |
Severance and benefit costs |  | $ | 6.2 |  |  | $ | 24.5 |  |  | $ | 17.9 |  |  | $ | 101.6 |  |  | $ | 200.6 |
Lease termination and store closure costs |  | 5.4 |  |  | 12.9 |  |  | 17.6 |  |  | 14.7 |  |  | 104.9 |
Other cash charges |  | 5.7 |  |  | 4.1 |  |  | 8.4 |  |  | 6.0 |  |  | 27.5 |
Total cash-related restructuring charges |  | 17.3 |  |  | 41.5 |  |  | 43.9 |  |  | 122.3 |  |  | 333.0 |
Non-cash charges: |  |  |  |  |  |  |  |  |  |
Impairment of assets (see Note 7) |  | 2.1 |  |  | 27.0 |  |  | 11.8 |  |  | 46.4 |  |  | 246.4 |
Inventory-related charges(a) |  | 0.6 |  |  | 81.0 |  |  | 1.3 |  |  | 135.0 |  |  | 199.2 |
Total non-cash charges |  | 2.7 |  |  | 108.0 |  |  | 13.1 |  |  | 181.4 |  |  | 445.6 |
Total charges |  | $ | 20.0 |  |  | $ | 149.5 |  |  | $ | 57.0 |  |  | $ | 303.7 |  |  | $ | 778.6 |
(a) | Cumulative inventory-related charges include $155.2 million associated with the destruction of inventory out of current liquidation channels, of which $63.5 million and $113.8 million was recorded during the three-month and six-month periods ended October 1, 2016, respectively. Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.
A summary of current period activity in the restructuring reserve related to the Way Forward Plan is as follows:
|  | Severance and Benefit Costs |  | Lease Termination and Store Closure Costs |  | Other Cash Charges |  | Total
|  | (millions)
Balance at April 1, 2017 |  | $ | 94.3 |  |  | $ | 34.3 |  |  | $ | 6.6 |  |  | $ | 135.2 |
Additions charged to expense |  | 17.9 |  |  | 17.6 |  |  | 8.4 |  |  | 43.9 |
Cash payments charged against reserve |  | (54.9 | ) |  | (12.5 | ) |  | (8.0 | ) |  | (75.4 | )
Non-cash adjustments |  | 0.9 |  |  | 5.5 |  |  | — |  |  | 6.4 |
Balance at September 30, 2017 |  | $ | 58.2 |  |  | $ | 44.9 |  |  | $ | 7.0 |  |  | $ | 110.1 |
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's operating structure in order to 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 resulted in a reduction in workforce and the closure of certain stores and shop-within-shops. Actions associated with the Global Reorganization Plan were completed by the end of the first quarter of Fiscal 2017 and no additional charges are expected to be incurred in relation to this plan. A summary of the charges recorded in connection with the Global Reorganization Plan during the three-month and six-month periods ended October 1, 2016, as well as the cumulative charges recorded since its inception, is as follows:
|  | October 1, 2016 |  |
|  | Three Months Ended |  | Six Months Ended |  | Cumulative Charges
|  | (millions)
Cash-related restructuring charges: |  |  |  |  |  |
Severance and benefit costs |  | $ | — |  |  | $ | 4.7 |  |  | $ | 69.1 |
Lease termination and store closure costs |  | — |  |  | 0.2 |  |  | 8.0 |
Other cash charges |  | — |  |  | — |  |  | 13.8 |
Total cash-related restructuring charges |  | — |  |  | 4.9 |  |  | 90.9 |
Non-cash charges: |  |  |  |  |  |
Impairment of assets (see Note 7) |  | — |  |  | — |  |  | 27.2 |
Inventory-related charges(a) |  | — |  |  | — |  |  | 20.4 |
Accelerated stock-based compensation expense(b) |  | — |  |  | — |  |  | 8.9 |
Total non-cash charges |  | — |  |  | — |  |  | 56.5 |
Total charges |  | $ | — |  |  | $ | 4.9 |  |  | $ | 147.4 |
(a) | Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.
(b) | Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with vesting provisions associated with certain separation agreements.
A summary of current period 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 Cash Charges |  | Total
|  | (millions)
Balance at April 1, 2017 |  | $ | 8.6 |  |  | $ | 3.4 |  |  | $ | 0.2 |  |  | $ | 12.2 |
Cash payments charged against reserve |  | (2.7 | ) |  | (1.4 | ) |  | — |  |  | (4.1 | )
Balance at September 30, 2017 |  | $ | 5.9 |  |  | $ | 2.0 |  |  | $ | 0.2 |  |  | $ | 8.1 |
Other Charges During the three-month and six-month periods ended September 30, 2017, the Company recorded other charges of $3.5 million and $7.0 million, respectively, related to depreciation expense associated with the Company's former Polo store at 711 Fifth Avenue in New York City, recorded after the store closed during the first quarter of Fiscal 2018 in connection with the Way Forward Plan. Although the Company is no longer generating revenue or has any other economic activity associated with its former Polo store, it continues to incur depreciation expense due to its involvement at the time of construction. Additionally, during the six months ended September 30, 2017, the Company recorded other charges of $6.7 million (inclusive of accelerated stock-based compensation expense of $2.1 million), primarily related to the departure of Mr. Stefan Larsson as the Company's President and Chief Executive Officer and as a member of its Board of Directors, effective as of May 1, 2017. Refer to Note 10 of the Fiscal 2017 10-K for additional discussion regarding Mr. Larsson's departure. These other charges were partially offset by the favorable impact of $2.2 million related to the reversal of reserves associated with the settlement of certain non-income tax issues during the second quarter of Fiscal 2018.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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