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Restructuring and Other Charges | 3 Months Ended
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Jun. 30, 2018
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. Fiscal 2019 Restructuring Plan On June 4, 2018, the Company's Board of Directors approved a restructuring plan associated with the Company's strategic objective of operating with discipline to drive sustainable growth (the "Fiscal 2019 Restructuring Plan"). The Fiscal 2019 Restructuring Plan includes the following restructuring-related activities: (i) the rightsizing and consolidation of the Company's global distribution network and corporate offices; (ii) targeted severance-related actions; and (iii) closure of certain of its stores and shop-within-shops. In connection with the Fiscal 2019 Restructuring Plan, the Company expects to incur total estimated charges of approximately $100 million to $150 million, comprised of cash-related charges of approximately $70 million to $110 million and non-cash charges of approximately $30 million to $40 million. A summary of the charges recorded in connection with the Fiscal 2019 Restructuring Plan during the three months ended June 30, 2018 is as follows:
|  | Three Months Ended
|  | June 30, 2018
|  | (millions)
Cash-related restructuring charges: |  |
Severance and benefit costs |  | $ | 8.2 |
Total cash-related restructuring charges |  | 8.2 |
Non-cash charges: |  |
Impairment of assets (see Note 7) |  | 1.3 |
Total non-cash charges |  | 1.3 |
Total charges |  | $ | 9.5 |
A summary of current period activity in the restructuring reserve related to the Fiscal 2019 Restructuring Plan is as follows:
|  | Severance and Benefit Costs |  | Total
|  | (millions)
Balance at March 31, 2018 |  | $ | — |  |  | $ | — |
Additions charged to expense |  | 8.2 |  |  | 8.2 |
Cash payments charged against reserve |  | (0.3 | ) |  | (0.3 | )
Balance at June 30, 2018 |  | $ | 7.9 |  |  | $ | 7.9 |
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 the Company's fiscal year ended April 1, 2017 ("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 digital commerce platform which was in development and shifting to a more cost-effective, flexible 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. 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 were largely completed during Fiscal 2018 and resulted in a further reduction in workforce and the closure of certain corporate office and store locations. The remaining activities, which are primarily lease-related, are expected to be completed during Fiscal 2019. 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 $470 million and non-cash charges of approximately $300 million. Cumulative charges incurred since inception were $675.7 million and the Company expects the remaining charges of approximately $95 million will be recorded during the remainder of Fiscal 2019. 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 periods ended June 30, 2018 and July 1, 2017, as well as the cumulative charges recorded since its inception, is as follows:
|  | Three Months Ended |  |
|  | June 30, 2018 |  | July 1, 2017 |  | Cumulative Charges
|  | (millions)
Cash-related restructuring charges: |  |  |  |  |  |
Severance and benefit costs |  | $ | 6.2 |  |  | $ | 11.7 |  |  | $ | 227.9 |
Lease termination and store closure costs |  | 0.1 |  |  | 12.2 |  |  | 120.6 |
Other cash charges |  | 0.2 |  |  | 2.7 |  |  | 25.6 |
Total cash-related restructuring charges |  | 6.5 |  |  | 26.6 |  |  | 374.1 |
Non-cash charges: |  |  |  |  |  |
Impairment of assets (see Note 7) |  | — |  |  | 9.7 |  |  | 250.6 |
Inventory-related charges(a) |  | — |  |  | 0.7 |  |  | 205.5 |
Accelerated stock-based compensation expense(b) |  | — |  |  | — |  |  | 0.7 |
Total non-cash charges |  | — |  |  | 10.4 |  |  | 456.8 |
Total charges |  | $ | 6.5 |  |  | $ | 37.0 |  |  | $ | 830.9 |
(a) | Cumulative inventory-related charges include $155.2 million associated with the destruction of inventory out of current liquidation channels. 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 Way Forward Plan is as follows:
|  | Severance and Benefit Costs |  | Lease Termination and Store Closure Costs |  | Other Cash Charges |  | Total
|  | (millions)
Balance at March 31, 2018 |  | $ | 37.6 |  |  | $ | 53.5 |  |  | $ | 1.8 |  |  | $ | 92.9 |
Additions charged to expense |  | 6.2 |  |  | 0.1 |  |  | 0.2 |  |  | 6.5 |
Cash payments charged against reserve |  | (14.1 | ) |  | (10.9 | ) |  | (0.5 | ) |  | (25.5 | )
Non-cash adjustments |  | (0.2 | ) |  | (0.1 | ) |  | — |  |  | (0.3 | )
Balance at June 30, 2018 |  | $ | 29.5 |  |  | $ | 42.6 |  |  | $ | 1.5 |  |  | $ | 73.6 |
Other Restructuring Plans As of June 30, 2018, the remaining restructuring reserve related to the Company's restructuring plan initiated during its fiscal year ended April 2, 2016 ("Fiscal 2016") was $1.4 million, reflecting $3.2 million of cash payments made during the three months ended June 30, 2018. No other activity occurred in connection with this restructuring plan during the three months ended June 30, 2018. Refer to Note 9 of the Fiscal 2018 10-K for additional discussion regarding this restructuring plan. Other Charges During each of the three-month periods ended June 30, 2018 and July 1, 2017, the Company recorded other charges of $3.5 million 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. During the three months ended June 30, 2018, the Company also recorded other charges of $4.2 million, primarily related to its customs audit (see Note 13). Additionally, during the three months ended July 1, 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 the Form 8-K filed on February 2, 2017 for additional discussion regarding the departure of Mr. Larsson.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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