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RESTRUCTURING

6 Months Ended

Jul. 01, 2023

Restructuring and Related Activities [Abstract]

RESTRUCTURING

RESTRUCTURING

    In the first quarter of fiscal year 2023, the Company announced its Transform and Grow plan ("TAG") designed to reduce operating costs, improve operating margins, and advance the Company’s commitment to profitable growth. The Company has now expanded the scope and duration of TAG to focus on a more comprehensive review of its global business operations. The expansion of TAG will put greater emphasis on initiatives to exit or minimize certain product offerings, brands and distribution, and to strengthen gross margin and increase the level of operating expense efficiencies. TAG is estimated to generate approximately $300 million of annualized operating income benefits by the end of 2025. The previously announced TAG plan was expected to generate $100 million of annualized operating income benefits by the end of 2024. The Company estimates approximately $100 million to $120 million in total charges over the duration of TAG and estimates approximately $35 million of charges in fiscal year 2023. With these measures, the Company's goal is to achieve adjusted gross margins in the low to mid 50% range and adjusted operating margins of approximately 10%.

The following table shows a summary of TAG Plan charges (in thousands):

			For the 13 Weeks Ended July 1, 2023												For the 26 Weeks Ended July 1, 2023
Cost of sales			$	2,911											$	8,174
Selling, general and administrative expenses			4,632												11,729
Consolidated			$	7,543											$	19,903

The following table shows a rollforward of the accrued liability related to the Company’s TAG Plan (in thousands):

			For the 13 Weeks Ended July 1, 2023
			Liabilities																								Liabilities
			April 1, 2023						Charges						Cash Payments												July 1, 2023
Professional services			$	20					$	967					$	89											$	898
Severance and employee-related benefits			4,500						3,666						3,353												4,813
Charges related to exits of certain product offerings			5,264						2,910						700												7,474
Total			$	9,784					$	7,543					$	4,142											$	13,185

			For the 26 Weeks Ended July 1, 2023
			Liabilities																								Liabilities
			December 31, 2022						Charges						Cash Payments						Non-cash Items						July 1, 2023
Professional services			$	—					$	1,002					$	104					$	—					$	898
Severance and employee-related benefits			—						10,727						5,914						—						4,813
Charges related to exits of certain product offerings			—						8,174						700						—						7,474
Total			$	—					$	19,903					$	6,718					$	—					$	13,185

TAG Plan restructuring charges by operating segment were as follows (in thousands):

			For the 13 Weeks Ended July 1, 2023						For the 26 Weeks Ended July 1, 2023
Americas			$	1,535					$	4,493
Europe			3,386						7,342
Asia			1,686						5,953
Corporate			936						2,115
Consolidated			$	7,543					$	19,903

In fiscal year 2022, the Company completed its New World Fossil 2.0 (“NWF 2.0”) restructuring program it launched in 2019. 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 July 1, 2023
			Liabilities																								Liabilities
			April 1, 2023												Cash Payments												July 1, 2023
Professional services			60												13												47
Severance and employee-related benefits			587												327												260
Total			$	647											$	340											$	307

			For the 13 Weeks Ended July 2, 2022
			Liabilities																								Liabilities
			April 2, 2022						Charges						Cash Payments						Non-cash Items						July 2, 2022
Store closures			$	264					$	—					$	264					$	—					$	—
Professional services			357						—						227						—						130
Severance and employee-related benefits			4,528						2,887						3,014						785						3,616
Total			$	5,149					$	2,887					$	3,505					$	785					$	3,746

			For the 26 Weeks Ended July 1, 2023
			Liabilities																								Liabilities
			December 31, 2022												Cash Payments												July 1, 2023
Professional services			74												27												47
Severance and employee-related benefits			2,821												2,561												260
Total			$	2,895											$	2,588											$	307

			For the 26 Weeks Ended July 2, 2022
			Liabilities																								Liabilities
			January 1, 2022						Charges						Cash Payments						Non-cash Items						July 2, 2022
Store closures			$	300					$	405					$	613					$	92					$	—
Professional services			643						135						648						—						130
Severance and employee-related benefits			4,388						4,898						4,885						785						3,616
Total			$	5,331					$	5,438					$	6,146					$	877					$	3,746

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

									For the 13 Weeks Ended July 2, 2022												For the 26 Weeks Ended July 2, 2022
Americas									$	36											$	83
Europe									282												1,531
Asia									40												1,204
Corporate									2,529												2,620
Consolidated									$	2,887											$	5,438

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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://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482017/420-10-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482017/420-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//420/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (e)
-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 5.P.4(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2

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