Quarterly report pursuant to Section 13 or 15(d)

Restructuring and Management Transition

v2.4.0.8
Restructuring and Management Transition
6 Months Ended
Aug. 02, 2014
Restructuring and Related Activities [Abstract]  
Restructuring and Management Transition
Restructuring and Management Transition
The composition of restructuring and management transition charges was as follows:
 
 
Three Months Ended
 
Six Months Ended
 
Cumulative
Amount Through
August 2, 2014
($ in millions)
August 2,
2014
 
August 3,
2013
 
August 2,
2014
 
August 3,
2013
 
Home office and stores
$

 
$
4

 
$
12

 
$
32

 
$
214

Store fixtures

 
17

 

 
45

 
133

Management transition
1

 
13

 
8

 
29

 
216

Other
4

 
13

 
7

 
13

 
130

Total
$
5

 
$
47

 
$
27

 
$
119

 
$
693



Home office and stores
During the six months ended August 2, 2014 and August 3, 2013, we recorded $12 million and $32 million, respectively, of charges for actions taken to reduce our home office and store expenses. In January 2014, we announced the closing of 33 department stores as part of our turnaround efforts. During the first half of 2014, we incurred charges of $12 million for employee termination benefits and lease termination costs associated with the closure of 32 of those stores. We expect to close the remaining store during the third quarter of 2014. The $32 million of charges in the first half of 2013 were associated with employee termination benefits.
Store fixtures
During the three months ended August 3, 2013, we recorded $1 million of charges for the write-off of store fixtures related to the renovations in our home department and $16 million of increased depreciation as a result of shortening the useful lives of fixtures in our department stores that were replaced during 2013.

During the six months ended August 3, 2013, we recorded $7 million of charges for the write-off of store fixtures related to the renovations in our home department and $29 million of increased depreciation as a result of shortening the useful lives of fixtures in our department stores that were replaced during 2013. In addition, during the six months ended August 3, 2013, we recorded $9 million of charges for the impairment of certain store fixtures related to our former shops strategy that were used in our prototype department store.
Management transition
During the three months ended August 2, 2014 and August 3, 2013, we implemented several changes within our management leadership team that resulted in management transition costs of $1 million and $13 million, respectively, for both incoming and outgoing members of management. During the six months ended August 2, 2014 and August 3, 2013, we recorded charges of $8 million and $29 million, respectively.
Other
During the three months ended August 2, 2014 and August 3, 2013, we recorded $4 million and $13 million, respectively, of miscellaneous restructuring charges. During the six months ended August 2, 2014 and August 3, 2013, we recorded $7 million and $13 million, respectively, of miscellaneous restructuring charges. The charges during both years were related primarily to contract termination costs associated with our previous marketing and shops strategy.






Activity for the restructuring and management transition liability for the six months ended August 2, 2014 was as follows:
 
($ in millions)
Home Office
and Stores
 
Management
Transition
 
Other
 
Total
February 1, 2014
$

 
$
3

 
$
30

 
$
33

Charges
12

 
8

 
7

 
27

Cash payments
(4
)
 
(9
)
 
(17
)
 
(30
)
Non-cash

 
(2
)
 
(1
)
 
(3
)
August 2, 2014
$
8

 
$

 
$
19

 
$
27

The non-cash amount represents charges primarily for stock-based compensation expense in conjunction with accelerated vesting related to terminations that did not result in cash expenditures.