Annual report pursuant to Section 13 and 15(d)

Restructuring and Management Transition

v3.20.1
Restructuring and Management Transition
12 Months Ended
Feb. 01, 2020
Restructuring and Related Activities [Abstract]  
Restructuring and Management Transition Restructuring and Management Transition

In the first quarter of 2019, the Company finalized plans to close 18 full-line stores and 9 ancillary home and furniture stores, further aligning the Company's brick-and-mortar presence with its omnichannel network, and enabling capital resources to be reallocated to locations and initiatives that offer the greatest long-term value potential. The planned store closures resulted in a $14 million asset impairment charge for store assets with limited future use and a $1 million severance charge for the expected displacement of store associates. During the second half of 2019, impairment charges of $5 million were recorded for the planned closure of 6 stores in 2020.

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:
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 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)
 
2019
 
2018
 
2017
 
2019
Home office and stores
 
$
43

 
$
13

 
$
176

 
$
529

Management transition
 
5

 
9

 

 
269

Other
 

 

 
8

 
186

Total
 
$
48

 
$
22

 
$
184

 
$
984


 
Activity for the restructuring and management transition liability for 2019 and 2018 was as follows:
($ in millions)
 
Home Office and Stores
 
Management Transition
 
Other
 
Total
February 3, 2018
 
$
34

 
$

 
$
7

 
$
41

Charges
 
16

 
9

 

 
25

Cash payments
 
(34
)
 
(9
)
 
(5
)
 
(48
)
February 2, 2019
 
16

 

 
2

 
18

Impact of ASC 842 adoption (Note 3)
 
(13
)
 

 
(1
)
 
(14
)
Charges
 
19

 
5

 
1

 
25

Cash payments
 
(16
)
 
(3
)
 
(2
)
 
(21
)
February 1, 2020
 
$
6

 
$
2

 
$

 
$
8