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Restructuring

12 Months Ended

Jan. 02, 2021

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

    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 consumer-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. The Company estimates total NWF 2.0 charges of $75 million to $85 million.

The following tables show a rollforward of the accrued liability related to the Company’s NWF 2.0 restructuring plan (in thousands):

			Fiscal Year 2020
			Liabilities												Cash Payments						Non-cash Items						Liabilities
			December 28, 2019						Charges																		January 2, 2021
Store closures			$	22					$	4,347					$	1,597					$	2,532					$	240
Professional services			2,824						7,503						8,047						—						2,280
Severance and employee-related benefits			4,238						24,658						21,155						—						7,741
Total			$	7,084					$	36,508					$	30,799					$	2,532					$	10,261

			Fiscal Year 2019
			Liabilities												Cash Payments						Non-cash Items						Liabilities
			December 29, 2018						Charges																		December 28, 2019
Store closures			$	—					$	597					$	—					$	575					$	22
Professional services			—						8,039						5,215						—						2,824
Severance and employee-related benefits			—						10,195						5,957						—						4,238
Total			$	—					$	18,831					$	11,172					$	575					$	7,084

NWF 2.0 restructuring charges by operating segment were as follows (in thousands):

			2020						2019
Americas			$	4,969					$	2,048
Europe			12,630						9,333
Asia			8,823						773
Corporate			10,086						6,677
Consolidated			$	36,508					$	18,831

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 2019. The remaining liability under NWF 1.0 is no longer material as of January 2, 2021, therefore the rollforward of the liability is not presented below.

The following table shows a rollforward of the accrued liability related to the Company’s NWF 1.0 restructuring plan (in thousands):

			Fiscal Year 2019
			Liabilities												Cash Payments						Non-cash Items						Liabilities
			December 29, 2018						Charges																		December 28, 2019
Store closures			$	2,818					$	2,971					$	1,673					$	2,253					$	1,863
Professional services			2,198						485						1,368						—						1,315
Severance and employee-related benefits			3,011						7,349						7,460						2,368						532
Total			$	8,027					$	10,805					$	10,501					$	4,621					$	3,710

NWF 1.0 restructuring charges by operating segment were as follows (in thousands):

			2019						2018
Americas			$	2,941					$	17,197
Europe			1,272						10,116
Asia			793						2,946
Corporate			5,799						16,371
Consolidated			$	10,805					$	46,630

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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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