XML 58 R41.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Impairment, Restructuring and Other Charges (Tables) | 12 Months Ended
--- | ---
Feb. 03, 2024
Restructuring and Related Activities [Abstract] |
Summary of Impairment and Restructuring Charges | The following table represents impairment, restructuring and other charges. All amounts were recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations, unless otherwise noted. As e-commerce penetration and growth has normalized coming out of the COVID-19 pandemic, the supply chain landscape has continued to evolve and financial results were negatively impacted. In Fiscal 2023, as part of our profit improvement initiative, we began to streamline and shift the operations of Quiet Platforms to better align with AEO's long term strategy. As a result of these changes, Quiet Platforms has refined its focus on its core capabilities as a regionalized fulfillment center network. The network has been updated to reflect this refined focus. The impact of the Quiet platforms business changes resulted in $119.6 million impairment, restructuring and other charges in Fiscal 2023. Our international business has also experienced changes in market conditions as a result of unbalanced recovery from the COVID-19 pandemic. The Company has made the decision to exit the Japan market fully as of the end of Fiscal 2023. Relative to Hong Kong, the Company has implemented a strategy to right-size our presence in the market given a slower than anticipated recovery. The impact of the change to our international strategy resulted in $21.8 million of impairment, restructuring and other charges recorded in Fiscal 2023.
|  | Fiscal Years Ending |
|  | February 3, |  |  | January 28, |  |  | January 29, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Charges recorded in cost of sales: |  |  |  |  |  |  |  |  |
Inventory charges (1) |  | $ | 10,950 |  |  | $ | — |  |  | $ | — |
Charges recorded in operating expenses: |  |  |  |  |  |  |  |  |
Quiet Platforms impairment, restructuring and other charges (2) |  | $ | 119,572 |  |  | $ | 3,844 |  |  | $ | — |
International impairment and restructuring costs (3) |  | $ | 10,882 |  |  | $ | 7,997 |  |  | $ | 6,174 |
Corporate impairment and restructuring charges (4) |  | $ | 11,241 |  |  | $ | — |  |  | $ | 2,575 |
U.S. and Canada store impairment charges(5) |  | $ | — |  |  | $ | 10,368 |  |  | $ | 3,195 |
Total impairment, restructuring and other charges |  | $ | 141,695 |  |  | $ | 22,209 |  |  | $ | 11,944 |
Total Company impairment, restructuring and other charges |  | $ | 152,645 |  |  | $ | 22,209 |  |  | $ | 11,944 |
The following footnotes relate to the impairment, restructuring and other charges in Fiscal 2023: (1) $11.0 million of inventory write-down charges related to our international businesses as further described in paragraph 1 of note (3) below. (2) $119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, we impaired definite lived intangible assets of $40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. We also impaired $39.6 million of goodwill. We recorded $24.7 million of long-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges. For Fiscal 2022, impairment of $2.8 million consisting of $2.3 million of ROU asset and $0.5 million of property and equipment related to the closure of the Jacksonville, FL distribution center and severance of $1.0 million related to employees of that distribution center. The Jacksonville distribution center was replaced with a higher productivity location in Atlanta, GA. (3) $10.9 million of charges related to exiting the Japan market, including the closure of all 4 stores in January 2024, as well as impairment related to our Hong Kong retail operations. Of this amount, $4.7 million related to Japan ROU assets, $3.6 million of Japan store property and equipment, $1.3 million of Hong Kong store ROU assets, and $1.3 million of employee severance. All impairments were recorded due to insufficient prospective cash flows to support the asset values. Additionally, we recorded $11.0 million of inventory write-down charges related to restructuring our international operations, which was recorded separately in Cost of Sales and discussed in note (1) above. For Fiscal 2022, $7.5 million of store impairment due to insufficient prospective cash flows to support the asset values and $0.5 million of severance related to down sizing Hong Kong retail operations. For Fiscal 2021, $6.2 million of store impairment related to insufficient prospective cash flows to support the asset value. (4) $11.2 million, consisting of $6.0 million of employee severance related to corporate realignment and other asset impairment of $5.2 million of investments related to further strategic business changes. For Fiscal 2021, impairment of $2.6 million of other assets. (5) For Fiscal 2022, $10.4 million of impairment charges, consisting of $9.2 million of ROU assets and $1.2 million of store property and equipment related to insufficient cash flows to support the asset value in the U.S. and Canada. For Fiscal 2021, $3.2 million consisting of $2.2 million of store property and equipment and $1.0 million of ROU assets related to insufficient cash flows to support the asset value.
Rollforward of Restructuring Liabilities Recognized in Consolidated Balance Sheet | A rollforward of the restructuring liabilities recognized in the Consolidated Balance Sheet is as follows:
|  |  |  | February 3, |
(In thousands) |  |  |  | 2024 |
Accrued liability as of January 28, 2023 |  |  |  | $ | — |
Add: Costs incurred, excluding non-cash charges |  |  |  |  | 17,407 |
Less: Cash payments and adjustments |  |  |  |  | (5,993 | )
Accrued liability as of February 3, 2024 |  |  |  | $ | 11,414 |

X
- References No definition available. + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of accrued liabilities. + References No definition available. + Details
Name: | us-gaap_ScheduleOfAccruedLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of costs incurred for restructuring including, but not limited to, exit and disposal activities, remediation, implementation, integration, asset impairment, and charges against earnings from the write-down of assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
Name: | us-gaap_ScheduleOfRestructuringAndRelatedCostsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration