Restructuring and Asset Impairment

4 Months Ended

Apr. 22, 2023

Restructuring And Related Activities [Abstract]

Note 5 – Restructuring and Asset Impairment

The following table provides the activity of reserves for closed properties for the 16-week period ended April 22, 2023. Included in the liability are lease-related ancillary costs from the date of closure to the end of the remaining lease term, as well as related severance. Reserves for closed properties recorded in the condensed consolidated balance sheets are included in “Other accrued expenses” in Current liabilities and “Other long-term liabilities” in Long-term liabilities based on the timing of when the obligations are expected to be paid. Reserves for severance are recorded in “Accrued payroll and benefits”.


	Reserves for Closed Properties
	Lease
	Ancillary
(In thousands)	Costs			Severance		Total
Balance at December 31, 2022	$	3,977		$	—	$	3,977
Changes in estimates		85			—		85
Accretion expense		36			—		36
Payments		(340	)		—		(340	)
Balance at April 22, 2023	$	3,758		$	—	$	3,758

Restructuring and asset impairment, net in the condensed consolidated statements of earnings consisted of the following:


	16 Weeks Ended
	April 22,			April 23,
(In thousands)	2023			2022
Asset impairment charges (a)	$	3,745		$	—
Gain on sales of assets related to closed facilities (b)		(61	)		—
Provision for severance		—			9
Other costs associated with site closures (c)		314			31
Changes in estimates (d)		85			(27	)
Total	$	4,083		$	13

(a) Asset impairment charges in the current year relate to two store closures within the Retail segment and impairment losses related to a distribution location that sustained significant storm damage within the Wholesale segment.

(b) Gain on sales of assets in the current year primarily relates to the sales of personal property of previously closed locations within both the Wholesale and Retail segments.

(d) Changes in estimates primarily relate to revised estimates for turnover and other lease ancillary costs associated with previously closed locations.

Long-lived assets which are not recoverable are measured at fair value on a nonrecurring basis using Level 3 inputs under the fair value hierarchy, as further described in Note 6. In the current year, assets with a book value of $7.4 million were measured at a fair value of $3.7 million, resulting in impairment charges of $3.7 million. There were no asset impairment charges in the prior year. The fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, including the expected proceeds from the sale of assets and expected insurance recoveries, discounted using a risk-adjusted rate of interest. The Company estimates future cash flows based on historical results of operations, external factors expected to impact future performance, experience and knowledge of the geographic area in which the assets are located, and when necessary, uses the support of real estate brokers.