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RESTRUCTURING | 9 Months Ended
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Oct. 03, 2020
Restructuring and Related Activities [Abstract] |
RESTRUCTURING | RESTRUCTURING The Company implemented a multi-year restructuring program that began in fiscal year 2016 called New World Fossil ("NWF 1.0") and concluded in fiscal year 2019. The remaining liability under NWF 1.0 is no longer material. In fiscal year 2019, the Company launched New World Fossil 2.0 - Transform to Grow Program (“NWF 2.0”), which is focused on optimizing the Company’s operating structure to be more efficient, with faster decision-making and a more customer-centric focus. In addition to optimizing the way the Company goes to market, the Company is also pursuing additional gross margin expansion opportunities. The Company is taking a zero-based budgeting approach to adjust its business model to enable more investment in digital capabilities and marketing, move closer to the consumer and react more quickly to the ever-evolving consumer shopping patterns. The Company also plans to change overall business processes and resources, creating a more centrally directed operating model, reducing complexity and redundancy, and operating at a lower cost base. The NWF 2.0 restructuring program was expanded to address additional challenges posed by COVID-19, including a number of cost saving measures such as store closures. Effective March 30, 2020, the Company implemented base salary reductions for a substantial number of its global employees, including each of its executive officers. Additionally, the cash fees for all non-employee directors serving on the Company’s Board of Directors were deferred for the first quarter of 2020 until the end of 2020 and the cash fees were reduced by 20% for the second quarter of fiscal year 2020. The Company has entered into agreements, or is in discussion with, most of its retail and corporate office landlords to modify its rent payments, receive other concessions or otherwise reduce its operating costs for these locations. The Company has also extended the payment terms with a number of its vendors and suppliers globally and has entered into agreements with licensors of certain third party trademarks to reduce the Company’s royalty obligations in 2020. The Company estimates total NWF 2.0 charges of $50 million to $70 million, with approximately $33 million of those charges in fiscal year 2020. The following table shows a rollforward of the accrued liability related to the Company’s NWF 2.0 restructuring plan (in thousands):
| For the 13 Weeks Ended October 3, 2020
| Liabilities |  |  |  |  |  |  |  | Liabilities
| July 4, 2020 |  | Charges |  | Cash Payments |  | Non-cash Items |  | October 3, 2020
Store closures | $ | 583 |  |  | $ | 731 |  |  | $ | 802 |  |  | $ | 512 |  |  | $ | — |
Professional services | 323 |  |  | 515 |  |  | 456 |  |  | — |  |  | 382 |
Severance and employee-related benefits | 6,348 |  |  | 4,467 |  |  | 6,427 |  |  | — |  |  | 4,388 |
Total | $ | 7,254 |  |  | $ | 5,713 |  |  | $ | 7,685 |  |  | $ | 512 |  |  | $ | 4,770 |
| For the 13 Weeks Ended September 28, 2019
| Liabilities |  |  |  |  |  |  |  | Liabilities
| June 29, 2019 |  | Charges |  | Cash Payments |  |  |  | September 28, 2019
Professional services | $ | 730 |  |  | $ | 2,411 |  |  | $ | 962 |  |  |  |  | $ | 2,179 |
Severance and employee-related benefits | 3,772 |  |  | 4,568 |  |  | 3,086 |  |  |  |  | 5,254 |
Total | $ | 4,502 |  |  | $ | 6,979 |  |  | $ | 4,048 |  |  |  |  | $ | 7,433 |
| For the 40 Weeks Ended October 3, 2020
| Liabilities |  |  |  |  |  |  |  | Liabilities
| December 28, 2019 |  | Charges |  | Cash Payments |  | Non-cash Items |  | October 3, 2020
Store closures | $ | 22 |  |  | $ | 3,424 |  |  | $ | 1,525 |  |  | $ | 1,921 |  |  | $ | — |
Professional services | 2,824 |  |  | 5,177 |  |  | 7,619 |  |  | — |  |  | 382 |
Severance and employee-related benefits | 4,238 |  |  | 17,019 |  |  | 16,869 |  |  | — |  |  | 4,388 |
Total | $ | 7,084 |  |  | $ | 25,620 |  |  | $ | 26,013 |  |  | $ | 1,921 |  |  | $ | 4,770 |
| For the 39 Weeks Ended September 28, 2019
| Liabilities |  |  |  |  |  |  |  | Liabilities
| December 29, 2018 |  | Charges |  | Cash Payments |  |  |  | September 28, 2019
Professional services | $ | — |  |  | $ | 5,049 |  |  | $ | 2,870 |  |  |  |  | $ | 2,179 |
Severance and employee-related benefits | — |  |  | 8,629 |  |  | 3,375 |  |  |  |  | 5,254 |
Total | $ | — |  |  | $ | 13,678 |  |  | $ | 6,245 |  |  |  |  | $ | 7,433 |
NWF 2.0 restructuring charges by operating segment were as follows (in thousands):
| For the 13 Weeks Ended October 3, 2020 |  | For the 13 Weeks Ended September 28, 2019 |  | For the 40 Weeks Ended October 3, 2020 |  | For the 39 Weeks Ended September 28, 2019 |  |
Americas | $ | 415 |  |  | $ | 549 |  |  | $ | 4,372 |  |  | $ | 549 |  |  |
Europe | 2,869 |  |  | 3,286 |  |  | 6,551 |  |  | 8,680 |  |  |
Asia | 2,331 |  |  | 136 |  |  | 6,776 |  |  | 136 |  |  |
Corporate | 98 |  |  | 3,008 |  |  | 7,921 |  |  | 4,313 |  |  |
Consolidated | $ | 5,713 |  |  | $ | 6,979 |  |  | $ | 25,620 |  |  | $ | 13,678 |  |  |

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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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