RESTRUCTURING ACTIVITIES

2017 Plan

Beginning in the second quarter of fiscal 2017, the Company implemented certain organizational changes and initiated the sale of certain assets and a change to the distribution model for certain brands (the “2017 Plan”). See Note 18 for additional information on the divestitures and distribution model changes. The Company completed the 2017 Plan during the fourth quarter of fiscal 2017. The Company expects annual pretax benefits of approximately $11.0 million as a result of the 2017 Plan. Costs incurred related to the 2017 Plan have been recorded within the Corporate category. The cumulative costs incurred is $11.3 million, with $1.5 million recorded in the restructuring costs line item as a component of cost of goods sold, and $9.8 million recorded in the restructuring and other related costs line item as a component of operating expenses.

The following is a summary of the activity during fiscal 2017, with respect to a reserve established by the Company in connection with the 2017 Plan, by category of costs.



(In millions)	Severance and employee related			Impairment of property and equipment			Costs associated with exit or disposal activities			Total
Balance at December 31, 2016	$	—		$	—		$	—		$	—
Restructuring costs	7.6			1.6			2.1			11.3
Amounts paid	(4.3		)	—			(0.3		)	(4.6		)
Charges against assets	—			(1.6		)	(1.8		)	(3.4		)
Balance at December 30, 2017	$	3.3		$	—		$	—		$	3.3

2016 Plan

On October 6, 2016, the Board of Directors of the Company approved a realignment of the Company’s consumer-direct operations (the “2016 Plan”), which resulted in the closure of certain retail stores. The Company closed 266 retail stores in connection with the 2016 Plan, which was completed during the fourth quarter of fiscal 2017. The Company expects annual pretax benefits of approximately $20.0 million as a result of the 2016 Plan. Costs incurred related to the 2016 Plan have been recorded within the Corporate category. The cumulative costs incurred is $75.1 million, with $10.2 million recorded in the restructuring costs line item as a component of cost of goods sold, and $64.9 million recorded in the restructuring and other related costs line item as a component of operating expenses.

The following is a summary of the activity during fiscal 2017 and 2016, with respect to a reserve established by the Company in connection with the 2016 Plan, by category of costs.



(In millions)	Severance and employee related			Impairment of property and equipment			Costs associated with exit or disposal activities			Total
Balance at January 2, 2016	$	—		$	—		$	—		$	—
Restructuring costs	0.8			—			5.0			5.8
Amounts paid	—			—			(1.1		)	(1.1		)
Charges against assets	—			—			(2.7		)	(2.7		)
Balance at December 31, 2016	$	0.8		$	—		$	1.2		$	2.0
Restructuring costs	3.5			9.4			56.4			69.3
Amounts paid	(4.0		)	—			(52.3		)	(56.3		)
Charges against assets	—			(9.4		)	(3.9		)	(13.3		)
Balance at December 30, 2017	$	0.3		$	—		$	1.4		$	1.7

2014 Plan

On July 9, 2014, the Board of Directors of the Company approved a realignment of the Company’s consumer-direct operations (the “2014 Plan”). As a part of the 2014 Plan, the Company closed 136 retail stores, consolidated certain consumer-direct support functions and implemented certain other organizational changes. The Company completed the 2014 Plan during the first quarter of fiscal 2016. Costs incurred related to the 2014 Plan have been recorded within the Corporate category. The cumulative costs incurred is $48.8 million, with $6.5 million recorded in the restructuring costs line item as a component of cost of goods sold, and $42.3 million recorded in the restructuring and other related costs line item as a component of operating expenses.

The following is a summary of the activity during fiscal 2017, 2016 and 2015, with respect to a reserve established by the Company in connection with the 2014 Plan, by category of costs.



(In millions)	Severance and employee related			Impairment of property and equipment			Costs associated with exit or disposal activities			Total
Balance at January 3, 2015	$	1.0		$	—		$	6.5		$	7.5
Restructuring costs	2.9			5.4			9.0			17.3
Amounts paid	(1.8		)	—			(7.2		)	(9.0		)
Charges against assets	—			(5.4		)	(1.8		)	(7.2		)
Balance at January 2, 2016	$	2.1		$	—		$	6.5		$	8.6
Restructuring costs	1.2			0.2			9.6			11.0
Amounts paid	(3.3		)	—			(7.5		)	(10.8		)
Charges against assets	—			(0.2		)	(6.9		)	(7.1		)
Balance at December 31, 2016	$	—		$	—		$	1.7		$	1.7
Restructuring cost adjustment	—			—			(0.7		)	(0.7		)
Amounts paid	—			—			(1.0		)	(1.0		)
Balance at December 30, 2017	$	—		$	—		$	—		$	—

Other Restructuring Activities

During fiscal 2017 and fiscal 2016, the Company recorded restructuring costs of $2.0 million and $13.9 million, respectively, in connection with certain organizational changes. The costs associated with these restructuring activities were recorded within the Company’s Corporate category in the restructuring and other related costs line item as a component of operating expenses.

During the fourth quarter of fiscal 2017, the Company recorded impairment costs of $68.6 million, related to indefinite-lived intangibles of its Sperry^® brand. The Company recorded these costs within its Corporate category in the impairment of intangible assets line item as a component of operating expenses in the consolidated statements of operations.

During the fourth quarters of fiscal 2016 and 2015, the Company recorded impairment costs of $7.1 million and $2.5 million, respectively, related to indefinite-lived intangibles of its Stride Rite^® brand. The Company recorded these costs within its Corporate category in the impairment of intangible assets line item as a component of operating expenses in the consolidated statements of operations.

The Company recorded impairment charges of $12.2 million and $11.6 million during fiscal 2016 and 2015, respectively, related to certain retail store assets where the estimated future cash flows did not support the net book value of the store assets. These costs were recorded within its corporate category in the restructuring and other related costs line item as a component of operating expenses in the consolidated statements of operations.

During fiscal 2015, the Company recorded of $4.2 million of costs related to its decision to wind-down operations of its Cushe^® brand. These costs included $2.6 million related to indefinite-lived intangibles and $1.6 million in other restructuring costs. The Company recorded these costs within its Corporate category in the impairment of intangible assets and restructuring and other related costs, respectively, line items as a component of operating expenses in the consolidated statements of operations and comprehensive income. During fiscal 2016, the Company recorded additional restructuring costs of $0.3 million related to the Cushe^® brand.

During fiscal 2015, the Company recorded restructuring costs of $2.0 million related to its international operations within its corporate category included in the restructuring and other related costs line item as a component of operating expenses in the consolidated statements of operations.