Annual report pursuant to Section 13 and 15(d)

Restructuring and Management Transition

v3.8.0.1
Restructuring and Management Transition
12 Months Ended
Feb. 03, 2018
Restructuring and Related Activities [Abstract]  
Restructuring and Management Transition
Restructuring and Management Transition

On March 17, 2017, the Company finalized its plans to close 138 stores to help align the Company's brick-and-mortar presence with its omnichannel network, thereby redirecting capital resources to invest in locations and initiatives that offer the greatest revenue potential. The store closures resulted in a $77 million asset impairment charge for store assets with limited future use and a $14 million severance charge for the expected displacement of store associates. During 2017, $52 million in store related closing and other costs such as certain lease obligations were recorded as a result of each respective store ceasing operations.
The components of Restructuring and management transition include:
VERP -- charges for enhanced retirement benefits, curtailment and other expenses related to the VERP (See Note 16);
Home office and stores -- charges for actions to reduce our store and home office expenses including employee termination benefits, store lease termination and impairment charges;
Management transition -- charges related to implementing changes within our management leadership team for both incoming and outgoing members of management; and
Other -- charges related primarily to contract termination costs and other costs associated with our previous shops strategy and costs related to the closure of certain supply chain locations.
 

The composition of restructuring and management transition charges was as follows:    
 
 
 
 
 
 
 
 
Cumulative Amount From Program Inception Through
($ in millions)
 
2017
 
2016
 
2015
 
2017
VERP
 
$
122

 
$

 
$

 
$
122

Home office and stores
 
176

 
8

 
42

 
473

Management transition
 

 
3

 
28

 
255

Other
 
5

 
15

 
14

 
183

Total
 
$
303

 
$
26

 
$
84

 
$
1,033


 
Activity for the restructuring and management transition liability for 2017 and 2016 was as follows:
($ in millions)
 
Home Office and Stores
 
Management Transition
 
Other
 
Total
January 30, 2016
 
$
18

 
$
10

 
$
23

 
$
51

Charges
 
9

 
3

 
15

 
27

Cash payments
 
(23
)
 
(13
)
 
(11
)
 
(47
)
January 28, 2017
 
4

 

 
27

 
31

Charges
 
102

 

 
5

 
107

Cash payments
 
(72
)
 

 
(25
)
 
(97
)
February 3, 2018
 
$
34

 
$

 
$
7

 
$
41