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Restructuring plan

9 Months Ended

Jun. 27, 2020

Restructuring and Related Activities [Abstract]

Restructuring plan

Restructuring plan

On June 23, 2020, the Company initiated a restructuring plan as part of its efforts to reduce operating expenses and preserve liquidity due to the uncertainty and challenges stemming from the COVID-19 pandemic. As part of the 2020 restructuring plan, the Company eliminated approximately 12% of its global headcount and closed its New York retail store and six satellite offices. The Company believes these initiatives will better align resources to provide further operating flexibility and more efficiently position the business for its long-term strategy. The Company expects activities under the 2020 restructuring plan to be substantially complete in the first quarter of fiscal 2021.

Total pre-tax restructuring and related costs under the 2020 restructuring plan were $26.4 million, which included $26.2 million incurred in the three months ended June 27, 2020 as presented in the table below. The remaining restructuring and related costs are nominal and are expected to be incurred through the completion of the 2020 restructuring plan in the first quarter of fiscal 2021. For the assets deemed to be impaired, the Company estimated fair value using an income-approach based on management’s forecast of future cash flows expected to be derived from the property.

			Costs incurred in the three months ended June 27, 2020
(In thousands)
Employee related costs			$	8,985
ROU asset impairment and abandonment charges			8,139
Property and equipment abandonment charges			5,699
Other restructuring costs			3,337
Total			$	26,160

The following table represents the restructuring and related costs recorded in the Company's condensed consolidated statements of operations and comprehensive income (loss):

			Three Months Ended
			June 27, 2020
(In thousands)
Research and development			$	4,949
Sales and marketing			19,788
General and administrative			1,423
Total			$	26,160

The following table summarizes the Company's restructuring activities recorded in accrued expenses and accrued compensation within the condensed consolidated balance sheets:

(In thousands)			Employee related costs						Other restructuring costs						Total
Balance at September 28, 2019			$	—					$	—					$	—
Restructuring charges			8,955						3,207						12,162
Cash paid			—						—						—
Balance at June 27, 2020			$	8,955					$	3,207					$	12,162

These costs require the Company to make certain judgments and estimates regarding the amount and timing of the 2020 restructuring plan and related impairment charges or recoveries. The estimated liability could change subsequent to its recognition, requiring adjustments to the expense and liability recorded. On a quarterly basis, the Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate as new or updated information becomes available.

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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

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