Wind down of Rebecca Taylor business

9 Months Ended

Oct. 29, 2022

Discontinued Operations and Disposal Groups [Abstract]

Note 2. Wind down of Rebecca Taylor business

On September 12, 2022, the Company announced its decision to wind down the Rebecca Taylor business. On September 30, 2022, the Company entered into amendments to the Term Loan Credit Facility, the 2018 Revolving Credit Facility and the Third Lien Credit Facility (see Note 5 "Long-Term Debt and Financing Arrangements"), which in part, permits the sale of the intellectual property of the Rebecca Taylor, Inc. and the Rebecca Taylor, Inc. liquidation.

As of October 29, 2022, the Company had assets totaling approximately $19,800 associated with the Rebecca Taylor business, of which $2,630, which represents the Rebecca Taylor tradename, has been classified as Assets held for sale on the Condensed

Consolidated Balance Sheets. Additionally, as of October 29, 2022, Assets held for sale on the Condensed Consolidated Balance Sheets includes $260 related to the Parker tradename.

The following table presents a summary of Rebecca Taylor wind down related charges, reported within the Rebecca Taylor and Parker segment, incurred for the three and nine months ended October 29, 2022:


(in thousands)	Three and Nine Months Ended October 29, 2022
Cost of products sold:
Inventory write-down	$	6,696
Selling, general and administrative expenses:
Operating lease right-of-use asset accelerated amortization		2,152
Accelerated depreciation and amortization		1,062
Employee termination costs, net (1)		556
Other advisory and liquidation costs		650
Total selling, general and administrative expenses		4,420
Total wind-down charges	$	11,116

(1) Employee termination costs, net are primarily related to severance and were recorded within Other accrued expenses on the Condensed Consolidated Balance Sheets. Substantially all severance costs will be paid by the end of fiscal 2022.

The Company may record additional non-cash charges in fiscal 2022 associated with the carrying value of certain tradenames, property and equipment, ROU assets and inventory, as well as cash charges associated with separation costs and contractual liabilities primarily related to its 18 retail stores, and office leases associated with Rebecca Taylor. The execution of the wind down is expected to be substantially completed by the end of fiscal 2022 and is subject to various risks and uncertainties that could impact the Company's ability to successfully complete the wind down or the costs associated with the wind down.