⁽¹⁾Fiscal year ended April 2, 2016 contained 53 weeks, whereas all other fiscal years presented are based on 52-week periods.

⁽²⁾Restructuring and other charges includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan (as defined in Note 11) and other restructuring initiatives, and costs recorded in connection with the acquisitions of Versace, Jimmy Choo and Michael Kors (HK) Limited and Subsidiaries (see Note 11 to the accompanying audited consolidated financial statements).

⁽³⁾Basic net (loss) income per ordinary share is computed by dividing net (loss) income available to ordinary shareholders of Capri by basic weighted average ordinary shares outstanding. Diluted net (loss) income per ordinary share is computed by dividing net (loss) income attributable to ordinary shareholders of Capri by diluted weighted average ordinary shares outstanding.

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	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018		April 1, 2017		April 2, 2016⁽¹⁾
	(data presented in millions, except for share and store data)
Operating Data:
Retail stores, including concessions, end of period	1,271		1,249		1,011		827		668

Balance Sheet Data:
Working capital	$	493	$	187	$	302	$	599	$	1,234
Total assets	$	7,946	$	6,650	$	4,059	$	2,410	$	2,567
Short-term debt	$	167	$	630	$	200	$	133	$	—
Long-term debt	$	2,012	$	1,936	$	675	$	—	$	2
Shareholders’ equity of Capri	$	2,167	$	2,429	$	2,018	$	1,593	$	1,996
Number of ordinary shares issued	217,320,010		216,050,939		210,991,091		209,332,493		208,084,175


⁽¹⁾	~~Fiscal year ended April 2, 2016 contains 53 weeks, whereas all other fiscal years presented are based on 52-week periods.~~


⁽²⁾	Gives effect to the corporate reorganization completed by the Company and certain of its affiliates in July 2011 (the “Reorganization”) and the 3.8-to-1 split of our ordinary shares (the “Share Split”) that occurred on November 30, 2011.


⁽³⁾	Basic net income per ordinary share is computed by dividing net income available to ordinary shareholders of MKHL by basic weighted average ordinary shares outstanding. Diluted net income per ordinary share is computed by dividing net income attributable to ordinary shareholders of MKHL by diluted weighted average ordinary shares outstanding.

Fiscal Years Ended
April 2,
2016 March 28,
2015 March 29,
2014 March 30,
2013 March 31,
2012
(data presented in millions, except for share and store data)
Operating Data:
Comparable retail store sales (decline) growth (4.2 )% 10.3 % 26.2 % 40.1 % 39.2 %
Retail stores, including concessions, end of period 668
526
405
304
237

Balance Sheet Data:
Working capital⁽¹⁾
$ 1,234.3
$ 1,663.4
$ 1,438.3
$ 816.5
$ 287.9
Total assets⁽¹⁾
$ 2,566.8
$ 2,684.6
$ 2,211.2
$ 1,280.1
$ 668.2
Revolving line of credit $ —
$ —
$ —
$ —
$ 22.7
Long-term debt $ 2.3
$ —
$ —
$ —
$ —
Shareholders' equity of MKHL $ 1,995.7
$ 2,241.0
$ 1,806.1
$ 1,047.2
$ 456.2
Number of ordinary shares issued 208,084,175
206,486,699
204,291,345
201,454,408
192,731,390


⁽¹⁾	All prior period deferred tax-related amounts have been reclassified in connection with Company's adoption of ASU 2015-14, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" on a retrospective basis.

⁽¹⁾Fiscal year ended April 2, 2016 contained 53 weeks, whereas all other fiscal years presented are based on 52-week periods.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis (“MD&A”) of our Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and notes thereto included as part of this Annual Report on Form 10-K. ~~This discussion contains forward-looking~~Forward-looking statements ~~that~~ are based upon current expectations. We sometimes identify forward-looking statements with such words as “may,” “expect,” “anticipate,” “estimate,” “seek,” “intend,” “believe” or similar words concerning future events. The forward-looking statements contained herein, include, without limitation, statements concerning future revenue sources and concentration, gross profit margins, selling and marketing expenses, capital expenditures, general and administrative expenses, capital resources, new stores, additional financings or borrowings and additional lossesprospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Capri Holdings Limited (the “Company”) about future events, and are therefore subject to risks and uncertainties ~~including, but not limited to, those discussed in this report that~~which could cause actual results to differ materially from the future results ~~contemplated~~expressed or implied by ~~these~~the forward-looking statements. ~~We also urge you~~All statements other than statements of historical facts included herein, may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. These forward-looking statements are not guarantees of future financial performance. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions, which could cause actual results to ~~carefully review~~differ materially from those projected or implied in any forward-looking statements. These risks, uncertainties and other factors include the effect of the COVID-19 pandemic and its potential material and significant impact on the Company’s future financial and operational results if retail stores remain closed and the pandemic is prolonged, including that our estimates could materially differ if the severity of the COVID-19 situation worsens, the length and severity of such outbreak across the globe and the pace of recovery following the COVID-19 pandemic, levels of cash flow and future availability of credit, compliance with restrictive covenants under the Company’s credit agreement, the Company’s ability to integrate successfully and to achieve anticipated benefits of any acquisition; the risk of disruptions to the Company’s businesses; the negative effects of events on the market price of the Company’s ordinary shares and its operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the Company’s businesses; fluctuations in demand for the Company’s products; levels of indebtedness (including the indebtedness incurred in connection with acquisitions); the timing and scope of future share buybacks, which may be made in open market or privately negotiated transactions, and are subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy and other relevant factors, and which share repurchases may be suspended or discontinued at any time, the level of other investing activities and uses of cash; changes in consumer traffic and retail trends; loss of market share and industry competition; fluctuations in the capital markets; fluctuations in interest and exchange rates; the occurrence of unforeseen epidemics and pandemics, disasters or catastrophes; political or economic instability in principal markets; adverse outcomes in litigation; and general, local and global economic, political, business and market conditions, as well as those risks set forth in the Company’s filings with the U.S. Securities and Exchange Commission, including in this Annual Report on Form 10-K, particularly under “Item ~~1A –~~1A. Risk ~~Factors.”~~Factors”

Overview

Our Business

~~We are~~Capri Holdings Limited is a global fashion luxury ~~lifestyle brand~~group, consisting of iconic brands that are industry leaders in design, style and craftsmanship, led by a world-class management team and renowned designers. Our brands cover the full spectrum of fashion luxury categories including women’s and men’s accessories, footwear and ready-to-wear as well as wearable technology, watches, jewelry, eyewear and a ~~renowned, award-winning designer. Since launching his namesake~~full line of fragrance products. Our goal is to continue to extend the global reach of our brands while ensuring that they maintain their independence and exclusive DNA.

Our Versace brand 35has long been recognized as one of the world’s leading international fashion design houses and is synonymous with Italian glamour and style. Founded in 1978 in Milan, Versace is known for its iconic and unmistakable style and unparalleled craftsmanship, over the past several decades the House of Versace has grown globally from its roots in haute couture, expanding into the design, manufacturing, distribution and retailing of ready-to-wear, accessories, footwear, eyewear, watches, jewelry, fragrance and home furnishings businesses. Versace’s design team is led by Donatella Versace, who has been the brand’s artistic director for over 20 years. Versace distributes its products through a worldwide distribution network, which includes boutiques in some of the world’s most glamorous cities, its e-commerce site, as well as through the most prestigious department and specialty stores worldwide.

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Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering is women’s luxury shoes, complemented by accessories, including handbags, small leather goods, scarves and belts, as well as a growing men’s luxury shoes and accessory business. In addition, certain categories, such as fragrances, sunglasses and eyewear are produced under licensing agreements. Jimmy Choo’s design team is led by Sandra Choi, who has been the Creative Director for the brand since its inception in 1996. Jimmy Choo products are unique, instinctively seductive and chic. The brand offers classic and timeless luxury products, as well as innovative products that are intended to set and lead fashion trends. Jimmy Choo is represented through its global store network, its e-commerce sites, as well as through the most prestigious department and specialty stores worldwide.

Our Michael Kors brand was launched almost 40 years ago by Michael Kors, ~~has featured distinctive designs, materials and craftsmanship with a jet-set aesthetic that combines stylish elegance and a sporty attitude. Mr. Kors’~~whose vision has taken the Company from its beginnings as an American luxury sportswear house to a global accessories, footwear and apparel company with a global distribution network that has presence in over 100 ~~countries. As a highly recognized luxury lifestyle brand in the Americas, with accelerating awareness in targeted international markets, we have experienced sales momentum~~countries through Company-operated retail stores and ~~intend to continue along this course as we grow our business.~~

~~We operate our business in three segments—retail, wholesale and licensing—and we have a strategically controlled global distribution network focused on company-operated retail stores,~~e-commerce sites, leading department stores, specialty stores and select licensing partners. As of April 2, 2016, our retail segment included 390 retail stores in the Americas (including concessions), 278 international retail stores (including concessions) throughout Europe and Asia and our e-commerce sites in the United States ("U.S.") and Canada. As of April 2, 2016, our wholesale segment included wholesale sales through approximately 1,532 department store doors and 929 specialty store doorsMichael Kors is a highly recognized luxury fashion brand in the Americas and ~~wholesale sales through approximately 1,222 specialty store doors~~Europe with growing brand awareness in other international markets. Michael Kors features distinctive designs, materials and 206 department store doors internationally. Our remaining revenue is generated through our licensing segment, through which we license to third parties certain production, sales and/or distribution rights. During Fiscal 2016, our licensing segment accounted for approximately 3.7% of our total revenuecraftsmanship with a jet-set aesthetic that combines stylish elegance and ~~consisted of royalties earned on licensed products and our geographic licenses.~~

~~We offer~~a sporty attitude. Michael Kors offers three primary collections: the Michael Kors Collection luxury line, the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line. The Michael KorsCollection establishes the aesthetic authority of ~~our~~the entire brand and is carried by many of our retail stores, our e-commerce sites, as well as in the finest luxury department stores in the world. ~~In 2004, we introduced~~ MICHAEL Michael Kors~~, which~~ has a strong focus on accessories, in addition to offering footwear and apparel, and addresses the significant demand opportunity in accessible luxury ~~goods. More recently, we~~goods.We have ~~begun to grow~~also been developing our ~~men's~~men’s business in recognition of the significant opportunity afforded by ~~our brand's~~the Michael Kors brand’s established fashion authority and the expanding ~~men's~~men’s market. Taken together, our ~~primary~~Michael Kors collections target a broad customer base while retaining our premium luxury image.

Certain Factors Affecting Financial Condition and Results of Operations

COVID-19 Pandemic. A novel strain of coronavirus commonly referred to as COVID-19 has spread rapidly across the globe in recent months, including throughout all major geographies in which we operate (the Americas, EMEA and Asia), resulting in adverse economic conditions and business disruptions, as well as significant volatility in global financial markets. Governments worldwide have imposed varying degrees of preventative and protective actions, such as temporary travel bans, forced business closures, and stay-at-home orders, all in an effort to reduce the spread of the virus. Such factors, among others, have resulted in a significant decline in retail traffic, tourism, and consumer spending on discretionary items. Additionally, during this period of uncertainty, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances, including work furloughs and reduced pay, which could lower consumers’ disposable income levels or willingness to purchase discretionary items. Further, even after such government restrictions and company initiatives are lifted, consumer behavior, spending levels, and/or shopping preferences, such as their willingness to congregate in shopping centers or other populated locations, could be adversely affected.

In connection with the COVID-19 pandemic, we have experienced varying degrees of business disruptions and periods of closures of our stores, distribution centers, and corporate facilities, as have our wholesale customers, licensing partners, suppliers and vendors. Retail traffic also continues to be challenging in those regions in which our stores are open. Additionally, our stores in the Americas and in Europe closed mid-March, and although a significant number of stores have since reopened, a large number of stores remain closed. Our wholesale business has also been adversely affected, particularly in the Americas and Europe, as a result of department store closures and lower traffic and consumer demand.

In response to the COVID-19 pandemic, we have taken preemptive actions to preserve cash and strengthen our liquidity, including:

•for Fiscal 2021, our board of directors annual total cash compensation will be reduced by 50%;

•temporarily foregoing and reducing executive compensation for Fiscal 2021. In addition, the company reduced overall salaries at various levels throughout the organization by approximately 20%;

•reducing our corporate workforce in order to generate additional payroll savings;

•temporarily furloughing or reducing work hours for a significant portion of our employees who nevertheless remain eligible for employee benefits during such period;

•applying for national payroll subsidy programs in various countries throughout Europe to further reduce payroll expense;

•significantly reducing inventory purchases by reducing or canceling commitments, redeploying inventory and consolidating upcoming seasons;

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•extending payment terms of our payables with our partners in order to maintain our financial flexibility for the long term;

•reducing capital expenditures in Fiscal 2021;

•minimizing operating expenses, including decreasing marketing spend, delaying or canceling select new store openings, reducing external third-party services and halting non-critical systems implementations in order to reduce costs;

•temporarily suspended our ERP project

•suspending the remaining $400 million under our current share repurchase program; and

•adding new approximately $230 million 364-day Revolver due June 2021 to bolster cash availability.

The COVID-19 pandemic remains highly volatile and continues to evolve on a daily basis. Accordingly, we cannot predict for how long and to what extent this crisis will impact our business operations or the global economy as a whole. We will continue to assess our operations location-by-location, taking into account the guidance of local governments and global health organizations to determine when our operations can begin returning to normal course of business. See Item 1A — "The COVID-19 pandemic could have a material adverse effect on our business and results of operations" for additional discussion regarding risks to our business associated with the COVID-19 pandemic.

Establishing brand identity and enhancing global presence.We intend to continue to increase our international presence and global brand recognition by growing our existing international operations through acquisitions, the formation of various joint ventures with international partners and continuing with our international licensing arrangements. We feel this is an efficient method for continued penetration into the global luxury goods market, especially for markets where we have yet to establish a substantial presence. In addition, our growth strategy includes assuming direct control of certain licensed international operations ~~which allows us~~ to better manage our growth opportunities in the related regions. ~~During the second quarter of Fiscal 2016, we made additional capital contributions to our Latin American joint venture, MK (Panama) Holdings, S.A.~~

Channel Shift and ~~subsidiaries (“MK Panama”), obtaining a 75% controlling interest in MK Panama. As such, we began to consolidate MK Panama into our operations beginning with the second quarter of Fiscal 2016 (see~~ ~~Note 3~~ to the accompanying consolidated financial statements for additional information). In addition, on January 1, 2016, we assumed direct control over the previously licensed business in South Korea. During the first quarter of Fiscal 2017, we plan to further expand our global presence by acquiring certain of our currently licensed operations in the Greater China region (see ~~Note 21~~ ~~to the accompanying consolidated financial statements for additional information).~~

Demand for Our Accessories and Related Merchandise. Our performance is affected by trends in the luxury goods industry, as well as shifts in demographics and changes in lifestyle preferences. ~~While~~Although the accessible luxury retail and wholesale industry has been recently challenged by lower consumer traffic trends, promotional selling environment resulting from a channel shift, a decrease in tourist travel, restrainedoverall consumer spending for personal luxury products has increased in recent years, consumer shopping preferences have continued to shift from physical stores to on-line shopping. We currently expect that this trend will continue in the foreseeable future. We continue to adjust our operating strategy to the changing business environment. We have finalized the planned store closures under the Michael Kors Retail Fleet Optimization Plan as of the end of Fiscal 2020. As of March 28, 2020, we closed at total of 143 stores at a total cost of $99 million and ~~other factors,~~recorded restructuring charges of $5 million and $41 million in Fiscal 2020 and Fiscal 2019, respectively. Collectively, we continue to anticipate ongoing savings as a result of the store closures and lower depreciation associated with the impairment charges being recorded. In addition, during the second quarter of Fiscal 2021, we announced that we plan to close approximately 170 of our full-price retail stores over the next two years, in order to improve the profitability of our retail store fleet. Over this time period, we expect ~~that our products will continue~~ to ~~be desired by our end-consumers.~~incur approximately $75 million of one-time costs associated with these store closures. See Item 9B - Other Information for additional information.

~~Currency fluctuation and the Strengthening U.S. Dollar.~~Foreign currency fluctuation. Our consolidated operations are impacted by the relationships between our reporting currency, the U.S. ~~Dollar,~~dollar, and those of our non-U.S. subsidiaries whose functional/local currency is other than the U.S. ~~Dollar. The recent decline in the value of~~dollar, particularly the Euro, ~~relative to~~ the ~~U.S. Dollar has impacted~~British Pound, the ~~conversion of~~Chinese Renminbi, the ~~results of our European operations, as they are reported, which represent approximately 21% of our consolidated revenue for Fiscal 2016. During Fiscal 2016,~~Japanese Yen, the ~~Euro experienced a decline in value relative to U.S. Dollar of approximately 13%, as compared to Fiscal 2015. In addition, our Fiscal 2016 results have been negatively impacted by a decline of 13% in~~Korean Won and the Canadian Dollar, ~~and~~among others. We continue to expect volatility in the global foreign currency exchange rates, which may have a ~~decline~~negative impact on the reported results of ~~approximately 9%~~certain of our non-U.S. subsidiaries in ~~Japanese Yen relative~~the future, when translated to ~~the~~ U.S. ~~Dollar, as compared to Fiscal 2015.~~Dollars.

Disruptions in shipping and distribution. Our operations are subject to the impact of shipping disruptions as a result of changes or damage to our distribution infrastructure, as well as due to external ~~factors. During~~factors, including the ~~fourth quarter~~impact of Fiscal 2015, our U.S. third party operated e-commerce fulfillment center was impacted by structural damage, which resulted in shipping delays to consumers who ordered merchandise through our e-commerce website. In addition, we were impacted by the work slowdowns and stoppages resulting from the labor dispute at the U.S. west coast ports during Fiscal 2015, which created a backlog of containers at the ports and resulted in inventory delivery delays, which continued into Fiscal 2016.COVID-19. Any future disruptions in our shipping and distribution network could have a negative impact on our results of operations.

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Costs of Manufacturing. and Tariffs. Our industry is subject to volatility in costs related to certain raw materials used in the manufacturing of our products. This volatility applies primarily to costs driven by commodity prices, which can increase or decrease dramatically over a short period of time. ~~These fluctuations~~In addition, our costs may be impacted by sanction tariffs imposed on our products due to changes in trade terms. On May 10, 2019, the U.S. increased the sanction tariffs rate from 10% to 25% on $200 billion of imports of select product categories (Tranche 3), which includes handbags and travel goods from China, and effective September 1, 2019, a 10% tariff on an additional $300 billion of goods from China, including ready-to-wear, footwear and men’s products, went into effect. If additional tariffs or trade restrictions are implemented by the U.S. or other countries, the cost of our products could increase which could adversely affect our business. In addition, commodity prices and tariffs may have ~~a material~~an impact on our ~~sales,~~revenues, results of operations and cash ~~flows to the extent they occur.~~flows. We use commercially reasonable efforts to mitigate these effects by sourcing our products as efficiently as ~~possible.~~possible and diversifying the countries where we produce. In addition, manufacturing labor costs are also subject to degrees of volatility based on local and global economic conditions. We use commercially reasonable efforts to source from localities that suit our manufacturing standards and result in more favorable labor driven costs to our products.

Segment Information

We operate in three reportable segments, which are as follows:

Versace

We generate revenue through the sale of Versace luxury ready-to-wear, accessories, footwear and home furnishings through directly operated Versace boutiques throughout North America (United States and Canada), EMEA (Europe, Middle East and Africa) and certain parts of Asia, as well as through Versace outlet stores and e-commerce sites. In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of jeans, fragrances, watches, jewelry and eyewear.

Jimmy Choo

We generate revenue through the sale of Jimmy Choo luxury goods to end clients through directly operated Jimmy Choo stores throughout the Americas (United States, Canada and Latin America), EMEA and certain parts of Asia, through our e-commerce sites, as well as through wholesale sales of luxury goods to distribution partners (including geographic licensing arrangements that allow third parties to use the Jimmy Choo tradename in connection with retail and/or wholesale sales of Jimmy Choo branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide. In addition, revenue is generated through product licensing agreements, which allow third parties to use the Jimmy Choo brand name and trademarks in connection with the manufacturing and sale of fragrances, sunglasses and eyewear.

Michael Kors

We generate revenue through the sale of Michael Kors products through four primary Michael Kors retail store formats: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce, through which we sell our products, as well as licensed products bearing our name, directly to the end consumer throughout the Americas, Europe and certain parts of Asia. Our Michael Kors e-commerce business includes e-commerce sites in the U.S., Canada and certain parts of Europe and Asia. We also sell Michael Kors products directly to department stores, primarily located across the Americas and Europe, to specialty stores and travel retail shops in the Americas, Europe and Asia, and to our geographic licensees in certain parts of EMEA, Asia and Brazil. In addition, revenue is generated through product and geographic licensing arrangements, which allow third parties to use the Michael Kors brand name and trademarks in connection with the manufacturing and sale of products, including watches, jewelry, fragrances and eyewear, as well as through geographic licensing arrangements, which allow third parties to use the Michael Kors tradename in connection with the retail and/or wholesale sales of our Michael Kors branded products in specific geographic regions.

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Unallocated Expenses

In addition to the reportable segments discussed above, we have certain corporate costs that are not directly attributable to our brands and, therefore, are not allocated to segments. Such costs primarily include certain administrative, corporate occupancy, and information systems expenses, including ERP system implementation costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges (including transaction and transition costs related to our recent acquisitions), impairment costs and COVID-19 related charges. The segment structure is consistent with how our chief operating decision maker plans and allocates resources, manages the business and assesses performance. The following table presents our total revenue and (loss) income from operations by segment for Fiscal 2020, Fiscal 2019 and Fiscal 2018 (in millions):


		Fiscal Years Ended
		March 28, 2020				March 30, 2019				March 31, 2018
Total revenue:
	Versace	$	843			$	137			$	—
	Jimmy Choo	555				590				223
	Michael Kors	4,153				4,511				4,496
Total revenue				$	5,551			$	5,238			$	4,719

(Loss) Income from operations:
	Versace	$	(8)			$	(11)			$	—
	Jimmy Choo	(13)				20				(4)
	Michael Kors	850				964				975
Total segment income from operations				829				973				971
Less:	Corporate expenses	(152)				(93)				(87)
	Restructuring and other charges	(42)				(124)				(102)
	Impairment of assets	(708)				(21)				(33)
	COVID-19 related charges ⁽¹⁾	(119)				—				—
Total (loss) income from operations				$	(192)			$	735			$	749

___________________

⁽¹⁾COVID-19 related charges primarily includes incremental inventory reserves and bad debt provision of $92 million and $25 million, respectively, recorded within costs of goods sold and selling, general and administrative expenses in the consolidated statements of operation.

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The following table presents our global network of retail stores and wholesale doors:


	As of
	March 28, 2020	March 30, 2019	March 31, 2018
Number of full price retail stores (including concessions):
Versace	157	146	—
Jimmy Choo	179	169	158
Michael Kors	568	587	596
	904	902	754

Number of outlet stores:
Versace	49	42	—
Jimmy Choo	47	39	24
Michael Kors	271	266	233
	367	347	257

Total number of retail stores	1,271	1,249	1,011

Total number of wholesale doors:
Versace	824	1,028	—
Jimmy Choo	554	596	629
Michael Kors	2,982	3,202	3,544
	4,360	4,826	4,173

The following table presents our retail stores by geographic location:


	As of					As of
	March 28, 2020					March 30, 2019
	Versace	Jimmy Choo	Michael Kors	Versace	Jimmy Choo	Michael Kors
Store count by region:
The Americas	30	45	380	28	43	390
EMEA	60	76	180	53	71	186
Asia	116	105	279	107	94	277
	206	226	839	188	208	853

Key Performance Indicators and Statistics

We use a number of key indicators of operating results to evaluate our performance, including the following (dollars in millions):


	Fiscal Years Ended
	March 28, 2020			March 30, 2019			March 31, 2018
Total revenue	$	5,551		$	5,238		$	4,719

Gross profit as a percent of total revenue	58.9		%	60.7		%	60.6		%
(Loss) income from operations	$	(192)		$	735		$	749
(Loss) income from operations as a percent of total revenue	(3.5)		%	14.0		%	15.9		%

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Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("(“U.S. ~~GAAP"~~GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those that are the most important to the portrayal of our ~~financial condition and~~ results of operations and financial condition and that require our most difficult, subjective and complex judgments to make estimates about the effect of matters that are inherently uncertain. In applying such policies, we must ~~make~~use certain assumptions that are based on our informed judgments, assessments of probability and best estimates. Estimates, by their nature, are subjective and are based on analysis of available information, including current and historical factors and the experience and judgment of management. We evaluate our assumptions and estimates on an ongoing basis. While our significant accounting policies are detailed in Note 2 to the accompanying financial statements, our critical accounting policies are discussed below and include revenue recognition, inventories, ~~impairment of~~ long-lived assets, goodwill and other indefinite-lived intangible assets, share-based compensation, derivatives and income taxes.

Revenue Recognition

Revenue is recognized when ~~there~~control of the promised goods or services is ~~persuasive evidence of~~transferred to our customers in an ~~arrangement, delivery has occurred,~~amount that reflects the ~~price has been fixed and determinable and collectability is reasonably assured.~~consideration we expect to be entitled to in exchange for goods or services. We recognize retail store revenue ~~upon~~when control of the product is transferred at the point of sale ofat our ~~products to retail consumers, net of estimated returns.~~owned stores, including concessions. Revenue from sales through our e-commerce ~~site~~sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, after merchandise is shipped and ~~title and risk~~control of ~~loss are~~the underlying product is transferred to our wholesale customers. To arrive at net sales for retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns, which is based on management’s review of historical and current customer returns. The amounts reserved for retail sales returns were ~~$4.7~~$12 million, ~~$2.5~~$15 million and ~~$2.3~~$12 million at ~~April 2, 2016,~~ March 28, ~~2015~~2020, March 30, 2019 and March ~~29, 2014,~~31, 2018, respectively. ~~To arrive at net~~Net sales for wholesale equals gross sales, ~~are~~ reduced by provisions for estimated future returns based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. Total sales reserves for wholesale were ~~$110.9~~$154 million, ~~$87.5~~$112 million and ~~$65.9~~$109 million at ~~April 2, 2016,~~ March 28, ~~2015~~2020, March 30, 2019 and March ~~29, 2014,~~31, 2018, respectively. These estimates are based on such factors as historical trends, actual and forecasted performance, and market conditions, which are reviewed by management on a quarterly basis. Our historical estimates of these costs were not materially different from actual results.

As of April 2, 2016, a hypothetical 1% increase in allowances for our reserves for sales returns, discounts, markdowns and other allowances would have decreased our Fiscal 2016 revenues by approximately $1.2 million.

Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported sales of licensed products bearing our tradenames at rates specified in the license agreements. These agreements are also subject to contractual minimum levels. Royalty revenue generated by ~~geography-specific~~geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as outlined in the agreements. These agreements allow for the use of our tradenames to sell our branded products in specific geographic regions.

Inventories

Our inventory costs include amounts paid to independent manufacturers, plus duties and freight to bring the goods to the Company’s warehouses, ~~which are located in the United States, Holland, Canada, Japan, South Korea and Hong Kong.~~as well as shipments to stores. We continuously evaluate the composition of our inventory and make adjustments when the cost of inventory is not expected to be fully recoverable. The net realizable value of our inventory is estimated based on historical experience, current and forecasted demand and market conditions. In addition, reserves for inventory losses are estimated based on historical experience and ~~physical~~ inventory counts. Our inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations. Our historical estimates of these adjustments have not differed materially from actual results.

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The combined total of raw materials and work in process inventory recorded on the our consolidated balance sheets as of March 28, 2020 and March 30, 2019 were $27 million and $25 million, respectively. The net realizable value of our inventory as of March 28, 2020 includes the adverse impacts related to the COVID-19 pandemic. This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, international tourism, and consumer consumption.

~~Long-lived Assets~~Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. We evaluate all long-lived assets, including fixed assets and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. For the purposes of impairment testing, we group our long-lived assets according to their lowest level of use, such as aggregating and capitalizing all construction costs related to arecognize retail store ~~into leasehold improvements~~revenue when control of the product is transferred at the point of sale at our owned stores, including concessions. Revenue from sales through our e-commerce sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and ~~those related~~allowances, after merchandise is shipped and control of the underlying product is transferred to our wholesale ~~business into shop-in-shops. Our leasehold improvements~~customers. To arrive at net sales for retail, gross sales are ~~typically amortized over the life of the store lease, including highly probable renewals, and our shop-in-shops are amortized over~~reduced by actual customer returns, as well as by a ~~useful life of three or four years. Our impairment testing~~provision for estimated future customer returns, which is based on management’s review of historical and current customer returns. The amounts reserved for retail sales returns were $12 million, $15 million and $12 million at March 28, 2020, March 30, 2019 and March 31, 2018, respectively. Net sales for wholesale equals gross sales, reduced by provisions for estimated future returns based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. Total sales reserves for wholesale were $154 million, $112 million and $109 million at March 28, 2020, March 30, 2019 and March 31, 2018, respectively. These estimates are based on such factors as historical trends, actual and forecasted performance, and market conditions, which are reviewed by management on a quarterly basis. Our historical estimates of these costs were not materially different from actual results.

Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported sales of licensed products bearing our ~~best estimate~~tradenames at rates specified in the license agreements. These agreements are also subject to contractual minimum levels. Royalty revenue generated by geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as outlined in the agreements. These agreements allow for the use of our tradenames to sell our branded products in specific geographic regions.

During Fiscal 2018, we launched our Michael Kors customer loyalty program, which allows customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at our retail stores and e-commerce sites. We allocate a portion of the ~~future operating cash flows. If~~initial sales transaction based on the ~~sum of our~~ estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, we recognize an impairment charge, which is measured as the amount by which the carrying value exceeds therelative fair value of the ~~asset.~~benefits based on projected timing of future redemptions and historical activity. These ~~estimates~~amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of ~~cash flow require significant management judgment~~an estimated “breakage,” is recorded as a reduction to revenue in the consolidated statements of income and certain assumptions about future volume, sales and expense growth rates, devaluation and inflation. As such, these estimates may differ from actual cash flows and future impairments may result if actual cash flows are lower than our expectations. For Fiscal 2016, Fiscal 2015, and Fiscal 2014, we recorded charges for impairments on fixed assets, primarily related to our retail segment, of $10.9 million, $0.8comprehensive income. The contract liability was $2 million and ~~$1.3~~$3 million as of March 28, 2020 and March 30, 2019, respectively. ~~See Note 6 to the accompanying consolidated audited financial statements for additional information.~~

~~Goodwill~~

We perform an impairment assessment of goodwill on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill is assessed during the fourth quarter of each fiscal year. These assessments are made with regards to reporting units within our wholesale, retailOur breakage and licensing segments where our goodwill is recorded, and are based on our current operating projections. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

We may assess our goodwill for impairment initially using a qualitative approach (“step zero”) to determine whether it is more likely than not that the fair value of goodwill is greater than its carrying value. If the results of the qualitative assessment indicate that it is not more likely than not that the fair value of goodwill exceeds its carrying value, a quantitative goodwill analysis would be performed to determine if impairment is required. We may also elect to perform a quantitative analysis of goodwill initially rather than using a qualitative approach. The valuation methods used in the quantitative fair value assessment, discounted cash flow and market multiples methods, require management to make certainother assumptions and estimates regarding certain industry trends and future profitability of our reporting units. If the carrying amount of a reporting unit exceeds its fair value, we would compare the implied fair value of the reporting unit goodwill to its carrying value. To compute the implied fair value, we would assign the fair value of the reporting unit to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. If the carrying value of the reporting unit’s goodwill exceeded the implied fair value of the reporting unit’s goodwill, we would record an impairment loss to write down such goodwill to its implied fair value. The valuation of goodwill is affected by, among other things, our business plan for the future and estimated results of future operations. Future events could cause us to conclude the impairment indicators exist and, therefore, that goodwill may be impaired.

During the fourth quarter of Fiscal 2016, we elected to bypass the initial qualitative assessment and performed our annual impairment analysis using a quantitative approach, using the discounted cash flow method to estimate fair value. Based on the results of this assessment, we concluded that the fair values of all reporting units significantly exceeded the related carrying amounts and there were no reporting units at risk of impairment. There were no impairment charges related to goodwill in any of the fiscal periods presented.

~~Share-based Compensation~~

We grant share-based awards to certain of our employees and directors. The grant date fair value of share options is calculated using the Black-Scholes option pricing model, which requires us to use subjective assumptions. The closing market price at the grant date is used to determine the ~~grant date~~estimated fair value of ~~restricted shares, restricted share units, and performance restricted share units. These values~~benefits are ~~recognized as expense over~~estimates, which could vary significantly from actual benefits that will be redeemed in the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.future.

Inventories

Our ~~expected volatility is based on~~inventory costs include amounts paid to independent manufacturers, plus duties and freight to bring the average volatility rates of similar actively traded companies over the past 4.5-9.5 years, which is our range of estimated expected holding periods. The expected holding period for performance-based options is based on the periodgoods to expiration, which is generally 9-10 years. This approach was chosen as it directly correlates to our service period. The expected holding period for time-based options is calculated using a simplified method, which uses the vesting term of the options, generally 4 years, and the contractual term of 7 years, resulting in holding periods of 4.5-4.75 years. The simplified method was chosen as a means to determine the Company’s ~~estimated holding period,~~warehouses, as ~~prior~~well as shipments to ~~December 2011,~~stores. We continuously evaluate the Company was privately held and, as such, there is insufficient historical option exercise experience. The risk-free rate is derived from the zero-coupon U.S. Treasury Strips yield curve based on the grant’s estimated holding period. Determining the grant date fair value of share-based awards requires considerable judgment, including estimating expected volatility, expected term, risk-free rate, and forfeitures. If factors change and we employ different assumptions, the fair value of future awards and resulting share-based compensation expense may differ significantly from what we have estimated in the past.

~~Derivative Financial Instruments~~

~~We use forward currency exchange contracts to manage our exposure to fluctuations in foreign currency for certain~~composition of our ~~transactions. We are exposed~~inventory and make adjustments when the cost of inventory is not expected to ~~risks on certain purchase commitments to foreign suppliers based on the~~be fully recoverable. The net realizable value of our ~~purchasing subsidiaries’ local currency relative to the currency requirement~~inventory is estimated based on historical experience, current and forecasted demand and market conditions. In addition, reserves for inventory losses are estimated based on historical experience and inventory counts. Our inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations. Our historical estimates of ~~the supplier~~these adjustments have not differed materially from actual results.

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The combined total of raw materials and work in process inventory recorded on the date of the commitment. As such, we enter into forward currency contracts that generally mature in 12 months or less, which is consistent with the related purchase commitments. We designate certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges, while others remain undesignated. All of our derivative instruments are recorded in our consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation. The effective portion of changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income (loss) until the hedged item effects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold. We use regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. Effectiveness is assessed on a quarterly basis and any portion of the designated hedge contracts deemed ineffective is recorded to foreign currency gain (loss). If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded in foreign currency gain (loss) in our consolidated statements of operations.

~~Income Taxes~~

Deferred income tax assets and liabilities reflect temporary differences between the tax basis and financial reporting basis of our assets and liabilities and are determined using the tax rates and laws in effect for the periods in which the differences are expected to reverse. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or our own estimates and judgments.

Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. We periodically review the recoverability of our deferred tax assets and provide valuation allowances as deemed necessary to reduce deferred tax assets to amounts that more-likely-than-not will be realized. This determination involves considerable judgment and our management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. Deferred tax assets could be reduced in the future if our estimates of taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.

We recognize the impact of an uncertain income tax position taken on our income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The effect of an uncertain income tax position will not be taken into account if the position has less than a 50% likelihood of being sustained. Our tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments for those positions. We record interest expense and penalties payable to relevant tax authorities as income tax expense.

~~Recently Adopted Accounting Pronouncements~~

~~In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,"~~ which eliminated the prior requirement to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. ASU 2015-17 will require all deferred tax assets and liabilities to be classified as noncurrent. ASU 2015-17 is effective beginning with our Fiscal 2018, with earlier application permitted. We elected to early adopt ASU 2015-17 during the third quarter of Fiscal 2016 on a retrospective basis. As of March 28, 2015, previously recorded current deferred tax assets and liabilities of $27.7 million and $3.7 million, respectively, were subject to reclassification to noncurrent. Our balance sheet as of March 28, ~~2015 also reflects a $7.3~~2020 and March 30, 2019 were $27 million ~~reclassification between total deferred tax assets~~ and ~~deferred tax liabilities due~~$25 million, respectively. The net realizable value of our inventory as of March 28, 2020 includes the adverse impacts related to the ~~fact that jurisdictional netting is not impacted by ASU 2015-17.~~

~~Recently Issued Accounting Pronouncements~~

~~We have considered all new accounting pronouncements,~~COVID-19 pandemic. This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, international tourism, and other than the recent pronouncements discussed below, have concluded that there are no new pronouncements that have a material impact on our results of operations, financial condition or cash flows based on current information.consumer consumption.

~~Revenue Recognition~~Key Performance Indicators and Statistics

~~In May 2014,~~We use a number of key indicators of operating results to evaluate our performance, including the ~~Financial~~following (dollars in millions):


	Fiscal Years Ended
	March 28, 2020			March 30, 2019			March 31, 2018
Total revenue	$	5,551		$	5,238		$	4,719

Gross profit as a percent of total revenue	58.9		%	60.7		%	60.6		%
(Loss) income from operations	$	(192)		$	735		$	749
(Loss) income from operations as a percent of total revenue	(3.5)		%	14.0		%	15.9		%

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Critical Accounting ~~Standards Board ("FASB") issued Accounting Standards Update ("ASU")No. 2014-09, “Revenue from Contracts~~Policies

The preparation of financial statements in conformity with ~~Customers~~,” which provides new guidance for revenues recognized from contracts with customers, and will replace the existing revenue recognition guidance. ASU No. 2014-09 requires that revenue is recognized at an amount the company is entitled to upon transferring control of goods or services to customers, as opposed to when risks and rewards transfer to a customer. In July 2015, the FASB issued ASU No. 2015-14, "~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,~~" which deferred the effective date of ASU No. 2014-09 by one year, making it effective for the interim reporting periods within the annual reporting period beginning after December 15, 2017, or beginning with our fiscal year 2019. This standard may be applied retrospectively to all prior periods presented, or retrospectively with a cumulative adjustment to retained earningsaccounting principles generally accepted in the ~~year~~United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of ~~adoption. We are currently evaluating the adoption method and the impact that ASU 2014-09 will have on our consolidated financial statements and related disclosures.~~

~~The FASB has issued several additional ASUs to provide implementation guidance on ASU No. 2015-14, including ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)"~~ ~~issued in March 2016and ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing"~~ ~~issued in April 2016. We will consider this guidance in evaluating the impact of ASU 2014-09.~~

~~Lease Accounting~~

~~In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842),"~~ which requires lessees to recognize a lease liability and a right-to-use asset on the balance sheet for all leases, except certain short-term leases. ASU 2016-02 is effective beginning with our fiscal year 2020, with early adoption permitted, and must be implemented using a modified restrospective approach for all leases existing at, or entered into after the beginning of the earliest comparative period that is presented in the financial statements. We are currently evaluating the impact of ASU 2016-09 on our consolidated financial statements but expect that the adoption of this standard will result in a significant increase in assets and liabilities ~~on our consolidated balance sheets.~~

~~Share-Based Compensation~~

~~In March 2016,~~and disclosure of contingent assets and liabilities at the ~~the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting~~," which simplifies accounting and presentation of share-based payments, primarily relating to the recognition and classification of excess tax benefits, accounting for forfeitures and tax withholding requirements. ASU 2016-09 is effective beginning with the our fiscal year 2018, with early adoption permitted and different permitted adoption methods for each provisiondate of the ~~standard. We are currently evaluating the impact of ASU 2016-09 on our consolidated~~ financial ~~statements.~~

~~In June 2014, the FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period~~,” ASU 2014-12 requires that a performance target under stock-based compensation arrangements that could be achieved after the service period is treated as a performance condition and not reflected in the grant-date fair value of the award. Rather, the related compensation cost should be recognized when it becomes probable that the performance targets will be achieved. ASU 2014-12 is effective beginning with the our fiscal year 2017, with early adoption and retrospective application permitted. We do not expect that ASU 2014-12 will have a material impact on our consolidated financial statements.

~~Business Combinations~~

~~In September 2015, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments~~," which simplifies the accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments and requiring such adjustments to be recognized in the reporting period in which they are determined. ASU 2015-16 requires disclosures of any amounts that would have been recorded in previous reporting periods if the adjustment was recognized as of the acquisition date. ASU 2015-16 is effective beginning with our fiscal year 2017, with earlier application permitted, and should be applied prospectively. We are currently evaluating the impact of ASU 2015-15 on our consolidated financial statements.

~~Inventory Valuation~~

~~In July 2015, the FASB issued ASU No. 2015-11,~~ ~~"Inventory (Topic 330): Simplifying the Measurement of Inventory."~~ The new guidance requires inventory accounted for using the average cost or first-in first-out method ("FIFO") to be measured at the lower of cost or net realizable value, replacing the current requirement to value inventory at the lower of cost or market. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective beginning with our fiscal year 2018 and should be applied prospectively, with earlier application permitted. We do not expect that ASU No. 2015-11 will have a material impact on our financial statements.

~~Segment Information~~

We generate revenue through three business segments: retail, wholesale and licensing. The following table presents our revenue and income from operations by segment for Fiscal 2016, Fiscal 2015 and Fiscal 2014 (in millions):

Fiscal Years Ended
April 2,
2016 March 28,
2015 March 29,
2014
Revenue:
Net sales: Retail $ 2,394.9
$ 2,134.6
$ 1,593.0
Wholesale 2,143.9
2,065.1
1,577.5
Licensing 173.3
171.8
140.3
Total revenue $ 4,712.1
$ 4,371.5
$ 3,310.8

Income from operations:
Retail $ 501.4
$ 557.2
$ 467.3
Wholesale 584.1
610.9
459.8
Licensing 89.6
88.9
81.1
Income from operations $ 1,175.1
$ 1,257.0
$ 1,008.2

~~Retail~~

~~We sell our products,~~statements, as well as ~~licensed products bearing our name, directly~~the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those that are the most important to the ~~end consumer through~~portrayal of our ~~retail stores~~results of operations and ~~concessions throughout~~financial condition and that require our most difficult, subjective and complex judgments to make estimates about the ~~Americas, Europe, Japan~~effect of matters that are inherently uncertain. In applying such policies, we must use certain assumptions that are based on our informed judgments, assessments of probability and ~~South Korea, as well as through~~best estimates. Estimates, by their nature, are subjective and are based on analysis of available information, including current and historical factors and the experience and judgment of management. We evaluate our ~~e-commerce sites, including~~assumptions and estimates on an ongoing basis. While our ~~e-commerce platform~~significant accounting policies are detailed in the U.S. launched in September 2014 and our e-commerce site in Canada launched in April 2015. We have four primary retail store formats: collection stores, lifestyle stores, outlet stores and e-commerce. Our collection stores are located in highly prestigious shopping areas, while our lifestyle stores are located in well-populated commercial shopping locations and leading regional shopping centers. Our outlet stores, which are generally in outlet centers, extend our reach to additional consumer groups. In addition to these four retail store formats, we operate concessions in a select number of department stores in the Americas, Europe and Asia.

~~The following table presents the growth in our network of retail stores during Fiscal 2016, Fiscal 2015, and Fiscal 2014:~~

April 2,
2016 March 28,
2015 March 29,
2014
Full price retail stores including concessions:
Number of stores 492
373
279
Increase during period 119
94
78
Percentage increase vs. prior year 31.9 % 33.7 % 38.8 %
Total gross square footage 1,140,025
859,352
562,773
Average square footage per store 2,317
2,304
2,017

Outlet stores:
Number of stores 176
153
126
Increase during period 23
27
23
Percentage increase vs. prior year 15.0 % 21.4 % 22.3 %
Total gross square footage 637,325
517,308
381,567
Average square footage per store 3,621
3,381
3,028

~~The following table presents our retail stores by geographic location:~~

April 2,
2016 March 28,
2015 March 29,
2014
Store count by region:
The Americas (U.S., Canada and Latin America) 390
⁽¹⁾
343
288
Europe 177
133
80
Asia (Japan and South Korea) 101
⁽¹⁾
50
37
Total 668
526
405

⁽¹⁾ Includes 14 stores in Latin America, as a result of consolidation of MK Panama into our operations beginning in July 2016 and 36 stores associated with the previously licensed business in South Korea, which we acquired on January 1, 2016. See Note 32 to the accompanying ~~consolidated~~ financial statements, ~~for additional information.~~

~~Wholesale~~

~~We sell~~ our ~~products directly to department stores primarily located across the Americas~~critical accounting policies are discussed below and Europe to accommodate consumers who prefer to shop at major department stores. In addition, we sell to specialty stores for those consumers who enjoy the boutique experience afforded by such stores, as well as to travel retail shops in the Americas, Europeinclude revenue recognition, inventories, long-lived assets, goodwill and Asia. We also have wholesale arrangements pursuant to which we sell products to certain of our licensees, including our licensees in Asia (which were previously reported within our Americas wholesale operations). We continue to focus our sales effortsother indefinite-lived intangible assets, share-based compensation, derivatives and drive sales in existing locations by enhancing presentation, primarily through the creation of more shop-in-shops with our proprietary fixtures that effectively communicate our brand and create a more personalized shopping experience for consumers. We tailor our assortments through wholesale product planning and allocation processes to better match the demands of our department store customers in each local market.income taxes.

~~The following table presents the increase (decrease) in our network of wholesale doors during Fiscal 2016, Fiscal 2015 and Fiscal 2014:~~

Fiscal Years Ended
April 2,
2016 March 28,
2015 March 29,
2014
Number of full-price wholesale doors 3,889
4,038
3,728
(Decrease) increase during period (149 ) 310
479
Percentage (decrease) increase vs. prior year (3.7 )% 8.3 % 14.7 %

~~Licensing~~

We generate revenue through product and geographic licensing arrangements. Our product license agreements allow third parties to use our brand name and trademarks in connection with the manufacturing and sale of a variety of products, including watches, fragrances, eyewear and jewelry. In our product licensing arrangements, we take an active role in the design process, marketing and distribution of products under our brands. Our geographic licensing arrangements allow third parties to use our tradenames in connection with the retail and/or wholesale sales of our branded products in specific geographic regions. On January 1, 2016, our licensing agreement in South Korea expired and we acquired direct control of the related retail and wholesale operations. In addition, we plan to acquire certain of our licensed operations in the Greater China region during the first quarter of Fiscal 2017.

Key Performance Indicators and Statistics

We use a number of key indicators of operating results to evaluate our performance, including the following (dollars in millions):


	Fiscal Years Ended
	March 28, 2020			March 30, 2019			March 31, 2018
Total revenue	$	5,551		$	5,238		$	4,719

Gross profit as a percent of total revenue	58.9		%	60.7		%	60.6		%
(Loss) income from operations	$	(192)		$	735		$	749
(Loss) income from operations as a percent of total revenue	(3.5)		%	14.0		%	15.9		%

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Fiscal years ended
April 2,
2016 March 28,
2015 March 29,
2014
Total revenue $ 4,712.1
$ 4,371.5
$ 3,310.8
Gross profit as a percent of total revenue 59.4 % 60.6 % 60.9 %
Income from operations $ 1,175.1
$ 1,257.0
$ 1,008.2
Retail net sales - The Americas $ 1,779.0
$ 1,656.1
$ 1,318.9
Retail net sales - Europe $ 509.6
$ 412.1
$ 235.6
Retail net sales - Asia $ 106.3
$ 66.4
$ 38.5
(Decrease) increase in comparable store net sales (4.2 )% 10.3 % 26.2 %
Wholesale net sales - The Americas $ 1,628.6
$ 1,662.5
$ 1,335.5
Wholesale net sales - Europe $ 406.4
$ 401.1
$ 242.0
Wholesale net sales - Asia $ 108.9
$ 1.5
$ —
Critical Accounting Policies

~~General Definitions for Operating Results~~

~~Net sales~~ ~~consist~~The preparation of ~~sales from comparable retail stores~~financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and ~~non-comparable retail stores, net~~assumptions that affect the reported amounts of ~~returns~~assets and ~~markdowns,~~liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those ~~made~~that are the most important to the portrayal of our results of operations and financial condition and that require our most difficult, subjective and complex judgments to make estimates about the effect of matters that are inherently uncertain. In applying such policies, we must use certain assumptions that are based on our informed judgments, assessments of probability and best estimates. Estimates, by their nature, are subjective and are based on analysis of available information, including current and historical factors and the experience and judgment of management. We evaluate our assumptions and estimates on an ongoing basis. While our significant accounting policies are detailed in Note 2 to the accompanying financial statements, our critical accounting policies are discussed below and include revenue recognition, inventories, long-lived assets, goodwill and other indefinite-lived intangible assets, share-based compensation, derivatives and income taxes.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our ~~wholesale~~ customers in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. We recognize retail store revenue when control of the product is transferred at the point of sale at our owned stores, including concessions. Revenue from sales through our e-commerce sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and ~~allowances.~~

~~Comparable store sales~~ ~~include sales from a store or e-commerce site that has been operating for one full year~~allowances, after ~~the end~~merchandise is shipped and control of the ~~first month of its operations. For stores that are closed, sales that were made in the final month of their operations (assuming closure prior~~underlying product is transferred to ~~the fiscal month's end), are excluded from the calculation of comparable store sales. Additionally,~~our wholesale customers. To arrive at net sales for ~~stores that~~retail, gross sales are ~~either relocated, or expanded~~reduced by actual customer returns, as well as by a ~~square footage~~provision for estimated future customer returns, which is based on management’s review of ~~25% or greater, in any given fiscal year,~~historical and current customer returns. The amounts reserved for retail sales returns were $12 million, $15 million and $12 million at March 28, 2020, March 30, 2019 and March 31, 2018, respectively. Net sales for wholesale equals gross sales, reduced by provisions for estimated future returns based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. Total sales reserves for wholesale were $154 million, $112 million and $109 million at March 28, 2020, March 30, 2019 and March 31, 2018, respectively. These estimates are ~~also excluded from the calculation of comparable store sales at the time of their move or interruption, until~~based on such ~~stores have been in their new location, or~~factors as historical trends, actual and forecasted performance, and market conditions, which are ~~operating under their new size/capacity, for at least one full year after the end of the first month of their relocation or expansion. All comparable store sales are presented~~reviewed by management on a ~~52-week~~quarterly basis. ~~Beginning with the first quarter~~Our historical estimates of ~~Fiscal 2016, comparable store sales are~~these costs were not materially different from actual results.

Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported ~~on a global basis, which better represents management’s view of our Company as an expanding global business.~~

~~Constant currency effects~~ are non-U.S. GAAP financial measures, which are provided to supplement our reported operating results to facilitate comparisons of our operating results and trends in our business, excluding the effects of foreign currency rate fluctuations. Because we are a global Company, foreign currency exchange rates may have a significant effect on our reported results. We calculate constant currency measures and the related foreign currency impacts by translating the current-year’s reported amounts into comparable amounts using prior year’s foreign exchange rates for each currency. All constant currency performance measures discussed below should be considered a supplement to and not in lieu of our operating performance measures calculated in accordance with U.S. GAAP.

~~Licensing revenue~~ ~~consists of fees charged on~~ sales of licensed products bearing our tradenames at rates specified in the license agreements. These agreements are also subject to contractual minimum levels. Royalty revenue generated by ~~our~~geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as ~~well as contractual royalty rates~~outlined in the agreements. These agreements allow for the use of our ~~trademarks~~tradenames to sell our branded products in ~~certain~~specific geographic ~~territories.~~regions.

~~Cost~~During Fiscal 2018, we launched our Michael Kors customer loyalty program, which allows customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at our retail stores and e-commerce sites. We allocate a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of an estimated “breakage,” is recorded as a reduction to revenue in the consolidated statements of income and comprehensive income. The contract liability was $2 million and $3 million as of March 28, 2020 and March 30, 2019, respectively. Our breakage and other assumptions used to determine the estimated fair value of benefits are estimates, which could vary significantly from actual benefits that will be redeemed in the future.

Inventories

Our inventory costs include amounts paid to independent manufacturers, plus duties and freight to bring the goods ~~sold~~ ~~includes~~to the Company’s warehouses, as well as shipments to stores. We continuously evaluate the composition of our inventory and make adjustments when the cost of inventory ~~sold, freight-in~~is not expected to be fully recoverable. The net realizable value of our inventory is estimated based on ~~merchandise~~historical experience, current and ~~foreign currency exchange gains/~~forecasted demand and market conditions. In addition, reserves for inventory losses are estimated based on historical experience and inventory counts. Our inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations. Our historical estimates of these adjustments have not differed materially from actual results.

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The combined total of raw materials and work in process inventory recorded on the our consolidated balance sheets as of March 28, 2020 and March 30, 2019 were $27 million and $25 million, respectively. The net realizable value of our inventory as of March 28, 2020 includes the adverse impacts related to ~~forward contracts for purchase commitments. All~~the COVID-19 pandemic. This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, international tourism, and consumer consumption.

Long-lived Assets

We evaluate all long-lived assets, including operating lease right-of-use assets, property and ~~occupancy costs are included~~equipment and definite-lived intangible assets, for impairment whenever events or changes in ~~Selling, general and administrative expenses~~ ~~(see below), and as a result our cost~~circumstances indicate that the carrying amount of ~~goods sold~~any such asset may not be ~~comparable~~recoverable. For the purposes of impairment testing, we group our long-lived assets according to their lowest level of use, such as aggregating and capitalizing all construction costs related to a retail store into right-of-use assets, leasehold improvements and those related to our wholesale business into shop-in-shops. Our leasehold improvements are typically amortized over the life of the store lease, including highly probable renewals, and our shop-in-shops are amortized over a useful life of three or four years. Our impairment testing is based on our best estimate of the future operating cash flows. If the sum of our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, we recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset. The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of current real estate market values. As such, these estimates may differ from actual results and are affected by future market and economic conditions.

During Fiscal 2020, Fiscal 2019 and Fiscal 2018, we recorded impairment charges of $357 million, $21 million and $33 million, respectively, related to our retail long-lived assets. The impairment charges recorded during Fiscal 2020 primarily related to operating lease right-of-use assets and the impairment charges recorded during Fiscal 2019 and Fiscal 2018 primarily related to property and equipment and lease rights for underperforming Michael Kors retail stores. Please refer to Note 8, Note 9 and Note 14 to the accompanying consolidated audited financial statements for additional information.

Goodwill and Other Indefinite-lived Intangible Assets

We record intangible assets based on their fair value on the date of acquisition. Goodwill is recorded for the difference between the fair value of the purchase consideration over the fair value of the net identifiable tangible and intangible assets acquired. The brand intangible assets recorded in connection with the acquisitions of Versace and Jimmy Choo were determined to be an indefinite-lived intangible assets, which are not subject to amortization. We perform an impairment assessment of goodwill, as well as the Versace brand and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill, the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

We may assess our goodwill and our brand indefinite-lived intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, we assess various factors including industry and market conditions, macroeconomic conditions and performance of our businesses. If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other ~~entities~~indefinite-lived intangible assets are impaired, a quantitative impairment analysis would be performed to determine if impairment is required. We may also elect to perform a quantitative analysis of goodwill and our indefinite-lived intangible assets initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. The valuation methods used in the quantitative fair value assessment include a discounted cash flow analysis, which requires management to make certain assumptions and estimates regarding industry trends and future profitability of our reporting units. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. This valuation is affected by certain estimates, including our future revenue growth rates, margins and discount rates. Future events could cause us to conclude that impairment indicators exist, and, therefore, that goodwill may be impaired.

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When performing a quantitative impairment assessment of our brand indefinite-lived intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the "relief from royalty" method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset. This approach is dependent on many factors, including estimates of future growth, royalty rates, and discount rates. Actual future results may differ from these estimates. Impairment loss is recognized when the estimated fair value of the indefinite-lived brand intangible assets is less than its carrying amount.

During the fourth quarter of Fiscal 2020, we performed our annual goodwill and indefinite-lived intangible assets impairment analysis for our three brands. Based on the results of our qualitative impairment assessment, we concluded that it is more likely than not that the fair value of the Michael Kors’ reporting units exceeded their carrying value and, therefore, were not impaired. We elected to perform our annual goodwill and brand indefinite-lived impairment analysis for both the Versace and Jimmy Choo using a quantitative approach, using a discounted cash flow analysis to estimate the fair values of each brands' reporting units. Based on the results of these assessments, we concluded that the fair values of the Jimmy Choo Retail and Jimmy Choo Licensing reporting units, along with the Jimmy Choo brand indefinite-lived intangible asset did not exceed the related carrying amounts. Jimmy Choo expects to experience a reduction in profitability trends, primarily related to the ongoing impact of the COVID-19 pandemic, resulting in declines in sales driven by the full and partial closures of a significant portion of our stores globally.

Accordingly, we recorded impairment charges of $171 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $180 million related to the Jimmy Choo brand intangible asset during Fiscal 2020. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income for the fiscal year ended March 28, 2020. If the discount rate increased by 0.5%, it may cause an additional impairment of $36 million and $13 million for the Jimmy Choo Retail and Licensing reporting units and $21 million for Jimmy Choo Brand intangible assets. See Note 9 to the accompanying audited financial statements for information relating to its annual impairment analysis performed during the fourth quarter of Fiscal 2020.

We also elected to perform our annual goodwill and brand impairment analysis for Versace using a quantitative approach, using a discounted cash flow analysis to estimate the fair values of each reporting unit. We concluded that the fair values of the Versace reporting units and the brand intangible asset exceeded the related carrying amounts and there were no impairment recorded. The fair value of the Versace Retail reporting unit, which has a goodwill balance of $213 million, is 4% higher than the carrying value. The fair value of the Versace wholesale brand intangible asset, which has a balance of $312 million, is 3% higher than the carrying value.

It is possible that our conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) our businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) the change of discount rates, or (v) the identification of our reporting units change, among other factors. Such changes could result in a future impairment charge of goodwill or other indefinite intangible assets.

Share-based Compensation

We grant share-based awards to certain of our employees and directors. The grant date fair value of share options is calculated using the Black-Scholes option pricing model, which requires us to use subjective assumptions. The closing market price at the grant date is used to determine the grant date fair value of restricted share units (“RSUs”) and performance-based RSUs. These values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have ~~chosen~~only time-based vesting requirements. Compensation expense for performance-based RSUs is recognized over the employees' requisite service period when attainment of the performance goals is deemed probable, which involves judgment as to ~~include some~~achievement of certain performance metrics.

We use our own historical experience in determining the expected holding period and volatility of our time-based share option awards. Determining the grant date fair value of share-based awards requires considerable judgment, including estimating expected volatility, expected term, risk-free rate, and forfeitures. If factors change and we employ different assumptions, the fair value of future awards and resulting share-based compensation expense may differ significantly from what we have estimated in the past.

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Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

We use forward currency exchange contracts to manage our exposure to fluctuations in foreign currency for certain of our transactions. We are exposed to risks on certain purchase commitments to foreign suppliers based on the value of our purchasing subsidiaries’ local currency relative to the currency requirement of the supplier on the date of the commitment. As such, we enter into forward currency contracts that generally mature in 12 months or ~~all~~less, which is consistent with the related purchase commitments. We designate certain contracts related to the purchase of ~~those expenses~~inventory that qualify for hedge accounting as cash flow hedges. All of our derivative instruments are recorded in our consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation. The effective portion of changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of ~~their~~accumulated other comprehensive income (loss) until the hedged item effects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold. We use regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. Effectiveness is assessed on a quarterly basis and any portion of the designated hedge contracts deemed ineffective is recorded to foreign currency gain (loss). If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded in foreign currency gain (loss) in our consolidated statements of operations.

~~Gross profit~~Net Investment Hedges

We also use fixed-to-fixed cross currency swap agreements to hedge our net investments in foreign operations against future volatility in the exchange rates between its U.S. Dollars and these foreign currencies. We have elected the spot method of designating these contracts under ASU 2017-12, as defined in Note 2 to the accompanying consolidated financial statements, and have designated these contracts as net investment hedges. The net gain or loss on net investment hedges is ~~total revenue (net sales plus licensing revenue) minus cost of goods sold. As a result of retail store operating~~reported within foreign currency translation gains and ~~occupancy costs being excluded from our cost of goods sold, our gross profit may not be comparable to that of other entities that have chosen to include some or all of those expenses~~losses (“CTA”), as a component of accumulated other comprehensive income (loss) on our consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest expense in our statement of operations and comprehensive income. Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.

We are exposed to the risk that counterparties to derivative contracts will fail to meet their ~~gross profit.~~contractual obligations. In order to mitigate counterparty credit risk, we only enter into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure.

~~Selling, general and administrative expenses~~ ~~consist~~During the fourth quarter of ~~warehousing and distribution costs, rent for~~Fiscal 2020, we terminated all of our distribution centers, store payroll, store occupancy costs (such as rent, common area maintenance, store pre-opening, real estate taxes and utilities), information technology and systems costs, corporate payroll and related benefits, advertising and promotion expense and other general expenses.

~~Depreciation and amortization~~ ~~includes depreciation and amortization of fixed and definite-lived intangible assets.~~

~~Impairment charges~~ ~~consist of charges to write-down fixed assets to fair value.~~

~~Income from operations~~ ~~consists of gross profit minus total operating expenses.~~

~~Other (income) expense,~~ net ~~includes a gain on acquisition of MK Korea during Fiscal 2016, as well as proceeds received~~ investment hedges related to our ~~anti-counterfeiting efforts and equity~~Euro-denominated subsidiaries. The early termination of these hedges resulted in the receipt of $296 million in cash during the fourth quarter of Fiscal 2020.

Income Taxes

Deferred income ~~or loss earned on our joint venture (prior to obtaining controlling interest in MK Panama). Future amounts may include any miscellaneous activities not directly related to our operations.~~

~~Interest expense, net~~ represents interest and fees on our revolving credit facilities and letters of credit (see “Liquidity and Capital Resources” for further detail on our credit facilities), as well as amortization of deferred financing costs, offset by interest earned on highly liquid investments (investments purchased with an original maturity of three months or less, classified as cash equivalents).

~~Foreign currency losses~~ includes net gains or losses related to the mark-to-market (fair value) on our forward currency contracts not designated as accounting hedges and unrealized income or loss from the re-measurement of monetarytax assets and liabilities ~~denominated in currencies other than~~reflect temporary differences between the ~~functional currencies~~tax basis and financial reporting basis of our ~~subsidiaries.~~assets and liabilities and are determined using the tax rates and laws in effect for the periods in which the differences are expected to reverse. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or our own estimates and judgments.

~~Noncontrolling~~Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. We periodically review the recoverability of our deferred tax assets and provide valuation allowances as deemed necessary to reduce deferred tax assets to amounts that more-likely-than-not will be realized. This determination involves considerable judgment and our management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. Deferred tax assets could be reduced in the future if our estimates of taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.

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We recognize the impact of an uncertain income tax position taken on our income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The effect of an uncertain income tax position will not be taken into account if the position has less than a 50% likelihood of being sustained. Our tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments for those positions. We record interest ~~represents~~ expense and penalties payable to relevant tax authorities as income tax expense.

In response to the COVID-19 pandemic, local governments enacted, or are in the process of enacting, measures to provide aid and economic stimulus to companies. On March 27, 2020, the United States government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which includes various tax provisions aimed at providing economic relief. We realized a slight favorable cash flow impact in Fiscal 2020 as a result of the deferral of income tax payments under the CARES Act and other local government relief initiatives. We also considered the significant adverse impact of COVID-19 on our business in assessing the realizability of our deferred tax assets. Based on this assessment, we determined that valuation allowances of approximately $65 million were needed against a portion of our non-US deferred tax assets. We will continue to monitor the ~~equity ownership in MK Panama, which is not attributable~~impacts of COVID-19 on our ability to realize our deferred tax assets and on the tax provision.

New Accounting Pronouncements

Please refer to Note 2 to the ~~Company. On June 28, 2015, we obtained a controlling interest in MK Panama~~accompanying consolidated financial statements for detailed information relating to recently adopted and ~~began to consolidate its financial results in our operations.~~recently issued accounting pronouncements and the associated impacts.

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~~Results of Operations~~

~~Comparison of Fiscal 2016 with Fiscal 2015~~

~~The following table details the results of our operations for Fiscal 2016 and Fiscal 2015 and expresses the relationship of certain line items to total revenue as a percentage (dollars in millions):~~

Fiscal Years Ended $ Change % Change
% of Total
Revenue for
Fiscal 2016

% of Total
Revenue for
Fiscal 2015
April 2,
2016 March 28,
2015
Statements of Operations Data:
Net sales $ 4,538.8
$ 4,199.7
$ 339.1
8.1 %
Licensing revenue 173.3
171.8
1.5
0.9 %
Total revenue 4,712.1
4,371.5
340.6
7.8 %
Cost of goods sold 1,914.9
1,723.8
191.1
11.1 % 40.6 % 39.4 %
Gross profit 2,797.2
2,647.7
149.5
5.6 % 59.4 % 60.6 %
Selling, general and administrative expenses 1,428.0
1,251.5
176.5
14.1 % 30.3 % 28.6 %
Depreciation and amortization 183.2
138.4
44.8
32.4 % 3.9 % 3.2 %
Impairment of long-lived assets 10.9
0.8
10.1
NM
0.2 % — %
Total operating expenses 1,622.1
1,390.7
231.4
16.6 % 34.4 % 31.8 %
Income from operations 1,175.1
1,257.0
(81.9 ) (6.5 )% 24.9 % 28.8 %
Other income (3.7 ) (1.6 ) (2.1 ) 131.3 % (0.1 )% (0.1 )%
Interest expense, net 1.7
0.2
1.5
750.0 % — % — %
Foreign currency loss 4.8
2.6
2.2
84.6 % 0.1 % 0.1 %
Income before provision for income taxes 1,172.3
1,255.8
(83.5 ) (6.6 )% 24.9 % 28.7 %
Provision for income taxes 334.6
374.8
(40.2 ) (10.7 )% 7.1 % 8.6 %
Net income 837.7
881.0
(43.3 ) (4.9 )%
Less: Net loss attributable to noncontrolling interest (1.4 ) —
(1.4 ) NM

Net income attributable to MKHL $ 839.1
$ 881.0
$ (41.9 ) (4.8 )%



NM	~~Not meaningful.~~

~~Total Revenue~~

Total revenue increased $340.6 million, or 7.8%, to $4.712 billion for the fiscal year ended April 2, 2016, compared to $4.372 billion for the fiscal year ended March 28, 2015, which included unfavorable foreign currency effects of $168.7 million primarily related to the weakening of the Euro, the Canadian Dollar, and the Japanese Yen against the U.S. Dollar in Fiscal 2016, as compared to Fiscal 2015. On a constant currency basis, our total revenue increased by $509.3 million, or 11.7%. Fiscal 2016 also included approximately $33.7 million of incremental net retail sales attributable to the inclusion of the 53rd week, as well as $28.9 million of incremental revenue recorded as a result of consolidating MK Panama and acquiring MK Korea during Fiscal 2016. The increase in our revenues was primarily due to an increase in our non-comparable retail store sales and wholesale sales, partially offset by lower comparable retail store sales.

~~The following table details revenues for our three business segments (dollars in millions):~~

Fiscal Years Ended % Change
% of Total
Revenue
for Fiscal
2016

% of Total
Revenue
for Fiscal
2015
April 2,
2016 March 28,
2015 $ Change As Reported
Constant
Currency

Revenue:
Net sales: Retail $ 2,394.9
$ 2,134.6
$ 260.3
12.2 % 17.2 % 50.8 % 48.8 %
Wholesale 2,143.9
2,065.1
78.8
3.8 % 6.8 % 45.5 % 47.3 %
Licensing 173.3
171.8
1.5
0.9 % 0.9 % 3.7 % 3.9 %
Total revenue $ 4,712.1
$ 4,371.5
$ 340.6
7.8 % 11.7 %

~~Retail~~

Net sales from our retail stores increased $260.3 million, or 12.2%, to $2.395 billion for Fiscal 2016, compared to $2.135 billion for Fiscal 2015, which included unfavorable foreign currency effects of $107.2 million. On a constant currency basis, net sales from our retail stores increased $367.5 million, or 17.2%. We operated 668 retail stores, including concessions, as of April 2, 2016, compared to 526 retail stores, including concessions, as of March 28, 2015.

Our comparable store sales declined $77.1 million, or 4.2%, during Fiscal 2016, which included unfavorable foreign currency effects of $61.3 million. Our comparable store sales benefited 194 basis points from the inclusion of the U.S. e-commerce sales in comparable store sales beginning with the third quarter of Fiscal 2016. On a constant currency basis, our comparable store sales declined $15.8 million, or 0.9%, primarily driven by lower comparable store sales from our retail business in the Americas, partially offset by increased comparable store sales from our international businesses. The decline in our comparable store sales primarily reflected lower sales of watches, apparel and jewelry, partially offset by increased sales of accessories during Fiscal 2016 compared to Fiscal 2015.

Our non-comparable store sales increased $337.4 million during Fiscal 2016, which included unfavorable foreign currency effects of $45.9 million. On a constant currency basis, our non-comparable store sales increased $383.3 million. Approximately 86% of this sales growth was attributable to operating 142 additional stores since March 28, 2015 (including 14 stores included as a result of obtaining controlling interest in MK Panama and 36 stores acquired in connection with the MK Korea acquisition) and approximately 14% was attributable to non-comparable sales from our e-commerce sites in the Americas, which included our U.S. e-commerce store sales through the second quarter of Fiscal 2016. Fiscal 2016 included approximately $33.7 million of incremental net retail sales attributable to the inclusion of the 53rd week.

~~Wholesale~~

Net sales to our wholesale customers increased $78.8 million, or 3.8%, to $2.144 billion for Fiscal 2016, compared to $2.065 billion for Fiscal 2015, which included unfavorable foreign currency effects of $61.5 million. On a constant currency basis, our wholesale net sales increased $140.3 million, or 6.8%. The increase in our wholesale net sales was primarily attributable to increased sales from our accessories and footwear product lines during Fiscal 2016 as compared to Fiscal 2015.

~~Licensing~~

Royalties earned on our licensing agreements increased $1.5 million, or 0.9%, to $173.3 million for Fiscal 2016, compared to $171.8 million for Fiscal 2015. The increase was primarily attributable to higher revenues earned on licensing agreements related to the sales of jewelry, eyewear and outerwear, as well as higher revenues from our geographic licensing arrangements in Asia, partially offset by lower licensing revenues related to the sale of watches.

~~Gross Profit~~

Gross profit increased $149.5 million, or 5.6%, to $2.797 billion during Fiscal 2016, compared to $2.648 billion for Fiscal 2015, which included unfavorable foreign currency effects of $113.5 million. Gross profit as a percentage of total revenue declined 120 basis points to 59.4% during Fiscal 2016, compared to 60.6% during Fiscal 2015. The decline in gross profit margin was attributable to gross profit margin declines of 230 basis points from our retail segment and 80 basis points from our wholesale segment. The decrease in gross profit margin from our retail segment was primarily due to an increase in promotional activity during Fiscal 2016, as compared to Fiscal 2015. The decrease in gross profit margin from our wholesale segment was primarily due to an increase in wholesale allowances during Fiscal 2016, as compared to Fiscal 2015. These declines were partially offset by a favorable geographic mix in Fiscal 2016, which was driven by a higher proportion of sales outside the U.S. than in prior year.

~~Total Operating Expenses~~

Total operating expenses increased $231.4 million, or 16.6%, to $1.622 billion during Fiscal 2016, compared to $1.391 billion for Fiscal 2015. Our operating expenses included a net favorable foreign currency impact of approximately $71.5 million. Total operating expenses as a percentage of total revenue increased to 34.4% in Fiscal 2016, compared to 31.8% in Fiscal 2015. The components that comprise total operating expenses are detailed below.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses increased $176.5 million, or 14.1%, to $1.428 billion during Fiscal 2016, compared to $1.252 billion for Fiscal 2015. The increase in selling, general and administrative expenses was primarily due to the following:

a $126.4 million increase in retail store-related costs, including $52.0 million in occupancy costs, $37.0 million in compensation-related costs, $12.2 million in store advertising and promotional spending and $6.4 million in freight-related costs. This increase was primarily attributable to our growth to 668 retail stores from 526 in the prior year and operating our e-commerce sites in the United States for the full year in Fiscal 2016;

~~a $14.3 million increase in corporate employee-related costs, primarily due to an increase in our corporate staff to support our global growth;~~

~~a $7.2 million increase in write-offs related to fixed assets;~~

~~a $7.1 million increase in selling costs;~~

~~a $6.1 million increase in distribution costs; and~~

~~a $5.7 million increase in corporate occupancy-related costs.~~

Selling, general and administrative expenses as a percentage of total revenue increased to 30.3% during Fiscal 2016, compared to 28.6% for Fiscal 2015. The increase as a percentage of total revenue was primarily due to the increase in our retail store costs during Fiscal 2016, as compared to Fiscal 2015.

~~Depreciation and Amortization~~

Depreciation and amortization increased $44.8 million, or 32.4%, to $183.2 million during Fiscal 2016, compared to $138.4 million for Fiscal 2015, primarily due to an increase in the build-out of our new retail stores, new shop-in-shop locations, increase in lease rights related to our new European stores, and investments made in our information systems infrastructure to accommodate our growth. Depreciation and amortization increased to 3.9% as a percentage of total revenue during Fiscal 2016, compared to 3.2% for Fiscal 2015.

~~Impairment of Long-Lived Assets~~

During Fiscal 2016, we recognized fixed asset impairment charges of approximately $10.9 million, $8.6 million of which primarily related to seven retail locations that are still in operation, $0.4 million related to our wholesale operations and $1.9 million related to a corporate fixed asset that is no longer in service. During Fiscal 2015, fixed asset impairment charges of $0.8 million related to two of our retail locations that were still in operation.

~~Income from Operations~~

As a result of the foregoing, income from operations decreased $81.9 million, or 6.5%, to $1.175 billion during Fiscal 2016, compared to $1.257 billion for Fiscal 2015, which included unfavorable foreign currency effects of $42.0 million. Income from operations as a percentage of total revenue declined to 24.9% in Fiscal 2016, compared to 28.8% in Fiscal 2015.

~~The following table details income from operations for our three business segments (dollars in millions):~~

Fiscal Years Ended $ Change % Change
% of Net
Sales/
Revenue for
Fiscal 2016
% of Net
Sales/
Revenue for
Fiscal 2015
April 2,
2016 March 28,
2015
Income from operations:
Retail $ 501.4
$ 557.2
$ (55.8 ) (10.0 )% 20.9 % 26.1 %
Wholesale 584.1
610.9
(26.8 ) (4.4 )% 27.2 % 29.6 %
Licensing 89.6
88.9
0.7
0.8 % 51.7 % 51.8 %
Income from operations $ 1,175.1
$ 1,257.0
$ (81.9 ) (6.5 )% 24.9 % 28.8 %

~~Retail~~

Income from operations for our retail segment declined $55.8 million, or 10.0%, to $501.4 million during Fiscal 2016, compared to $557.2 million for Fiscal 2015. Income from operations as a percentage of net retail sales for the retail segment declined by approximately 520 basis points to 20.9% during Fiscal 2016. The decrease in retail income from operations as a percentage of net retail sales was primarily due to an increase in operating expenses as a percentage of net retail sales of approximately 290 basis points, as well as due to the decrease in gross profit margin, as previously discussed above, during Fiscal 2016, as compared to Fiscal 2015. The increase in operating expenses as a percentage of net retail sales was largely due to increased retail store-related costs and higher depreciation expense primarily attributable to new store openings, as well as fixed asset impairment charges recorded for certain of our retail stores.

~~Wholesale~~

Income from operations for our wholesale segment declined $26.8 million, or 4.4%, to $584.1 million during Fiscal 2016, compared to $610.9 million for Fiscal 2015. Income from operations as a percentage of net wholesale sales decreased approximately 240 basis points to 27.2%. This decrease in wholesale income from operations as a percentage of wholesale net sales was due to a net increase in operating expenses as a percentage of net wholesale sales of approximately 160 basis points during Fiscal 2016 as compared to Fiscal 2015, which was largely attributable to higher depreciation expenses, distribution costs, write-offs related to fixed assets and corporate allocated expenses. The increase in wholesale income from operations as a percentage of net sales was also attributable to a lower gross profit margin, as previously discussed.

~~Licensing~~

Income from operations for our licensing segment increased $0.7 million, or 0.8%, to $89.6 million during Fiscal 2016, compared to $88.9 million for Fiscal 2015. Income from operations as a percentage of licensing revenue declined approximately 10 basis points to 51.7%. The decline in licensing income from operations as a percentage of licensing revenue was due to an increase in operating expenses as a percentage of licensing revenues during Fiscal 2016, as compared to Fiscal 2015. This increase was largely due to increased costs related to protection of our intellectual property and higher depreciation expenses, partially offset by lower advertising costs as a percentage of licensing revenue.

~~Other Income, net~~

Other income of $3.7 million during Fiscal 2016 was primarily comprised of a $3.7 million gain on acquisition of MK Korea (see Note 3 to the accompanying consolidated financial statements) and $1.0 million in income related to our anti-counterfeiting efforts, partially offset by $1.0 million of losses related to our joint venture, which were recorded under the equity method of accounting prior to obtaining controlling interest in MK Panama during the second quarter of Fiscal 2016. During Fiscal 2015, other income of $1.6 million was primarily comprised of $1.5 million in income related to our anti-counterfeiting efforts.

~~Interest expense, net~~

Interest expense, net increased $1.5 million to $1.7 million for Fiscal 2016, as compared to $0.2 million for Fiscal 2015, primarily due to lower interest income earned on our short-term investments (cash equivalents), as well as higher interest expense on borrowings during Fiscal 2016.

~~Foreign Currency Loss~~

We recognized a foreign currency losses of $4.8 million and $2.6 million, respectively, during Fiscal 2016 and Fiscal 2015. These foreign currency losses included mark-to-market adjustments related to our forward foreign currency contracts not designated as accounting hedges, as well as gains and losses on the revaluation and settlement of certain of our accounts payable in currencies other than the functional currency of the applicable reporting units, and the remeasurement of intercompany loans with certain of our subsidiaries.

~~Provision for Income Taxes~~

We recognized $334.6 million of income tax expense during Fiscal 2016, compared with $374.8 million for Fiscal 2015. Our effective tax rate for Fiscal 2016 was 28.5%, compared to 29.8% for Fiscal 2015. The decrease in our effective tax rate was primarily due to the increase in taxable income in certain of our non-U.S. subsidiaries (predominantly European operations) during Fiscal 2016, which are subject to lower statutory income tax rates, as well as state tax benefits recognized during Fiscal 2016. Given that certain of our non-U.S. operations have become consistently profitable, we expect this decrease on our combined consolidated effective rate to continue. The Fiscal 2015 effective tax rate was also favorably impacted by the settlement of certain financial instruments in connection with our international income tax structuring.

Our effective tax rate may fluctuate from time to time due to the effects of changes in U.S. federal, state and local taxes and tax rates in foreign jurisdictions. In addition, factors such as the geographic mix of earnings, enacted tax legislation and the results of various global tax strategies, may also impact our effective tax rate in future periods.

~~Net Income Attributable to Noncontrolling Interest~~

During Fiscal 2016, we recorded a net loss attributable to our noncontrolling interest in MK Panama of $1.4 million. This loss represents the share of MK Panama's income that is not attributable to the Company.

~~Net Income Attributable to MKHL~~

As a result of the foregoing, our net income declined $41.9 million, or 4.8%, to $839.1 million during Fiscal 2016, compared to $881.0 million for Fiscal 2015, which included unfavorable foreign currency effects of $38.1 million.

Results of Operations

A discussion regarding our results of operations for Fiscal 2020 compared to Fiscal 2019 is presented below. A discussion regarding our results of operations for Fiscal 2019 compared to Fiscal 2018 can be found under Item 7 in our Annual Report on Form 10-K for the year ended March 30, 2019, filed with the SEC on May 29, 2019, which is available on the SEC’s website at www.sec.gov and our investor website at www.capriholdings.com.

Comparison of Fiscal ~~2015~~2020 with Fiscal ~~2014~~2019

The following table details the results of our operations for Fiscal ~~2015~~2020 and Fiscal ~~2014~~2019 and expresses the relationship of certain line items to total revenue as a percentage (dollars in ~~millions~~millions):


	Fiscal Years Ended						$ Change		% Change		% of Total Revenue for Fiscal 2020		% of Total Revenue for Fiscal 2019
	March 28, 2020		March 30, 2019
Statements of Operations Data:
Total revenue	$	5,551	$	5,238	$	313	6.0	%
Cost of goods sold	2,280		2,058		222		10.8	%	41.1	%	39.3	%
Gross profit	3,271		3,180		91		2.9	%	58.9	%	60.7	%
Selling, general and administrative expenses	2,464		2,075		389		18.7	%	44.4	%	39.6	%
Depreciation and amortization	249		225		24		10.7	%	4.5	%	4.3	%
Impairment of assets	708		21		687		NM		12.8	%	0.4	%
Restructuring and other charges ⁽¹⁾	42		124		(82)		(66.1)	%	0.8	%	2.4	%
Total operating expenses	3,463		2,445		1,018		41.6	%	62.4	%	46.7	%
(Loss) income from operations	(192)		735		(927)		(126.1)	%	(3.5)	%	14.0	%
Other income, net	(6)		(4)		(2)		(50.0)	%	(0.1)	%	(0.1)	%
Interest expense, net	18		38		(20)		(52.6)	%	0.3	%	0.7	%
Foreign currency loss	11		80		(69)		(86.3)	%	0.2	%	1.5	%
(Loss) income before provision for income taxes	(215)		621		(836)		(134.6)	%	(3.9)	%	11.9	%
Provision for income taxes	10		79		(69)		(87.3)	%	0.2	%	1.5	%
Net (loss) income	(225)		542		(767)		(141.5)	%
Less: Net loss attributable to noncontrolling interests	(2)		(1)		(1)		NM
Net (loss) income attributable to Capri	$	(223)	$	543	$	(766)	(141.1)	%

___________________

NM Not meaningful.

⁽¹⁾Restructuring and ~~all percentages calculated based on unrounded numbers):~~

Fiscal Years Ended $ Change % Change
% of Total
Revenue for
Fiscal 2015

% of Total
Revenue for
Fiscal 2014
March 28,
2015 March 29,
2014
Statements of Operations Data:
Net sales $ 4,199.7
$ 3,170.5
$ 1,029.2
32.5 %
Licensing revenue 171.8
140.3
31.5
22.4 %
Total revenue 4,371.5
3,310.8
1,060.7
32.0 %
Cost of goods sold 1,723.8
1,294.7
429.1
33.1 % 39.4 % 39.1 %
Gross profit 2,647.7
2,016.1
631.6
31.3 % 60.6 % 60.9 %
Selling, general and administrative expenses 1,251.5
926.9
324.6
35.0 % 28.6 % 28.0 %
Depreciation and amortization 138.4
79.7
58.7
73.8 % 3.2 % 2.4 %
Impairment of long-lived assets 0.8
1.3
(0.5 ) (38.3 )% — % — %
Total operating expenses 1,390.7
1,007.9
382.8
38.0 % 31.8 % 30.4 %
Income from operations 1,257.0
1,008.2
248.8
24.7 % 28.8 % 30.5 %
Other income (1.6 ) —
(1.6 ) NM
(0.1 )% — %
Interest expense, net 0.2
0.4
(0.2 ) (45.3 )% — % — %
Foreign currency loss 2.6
0.1
2.5
NM
0.1 % — %
Income before provision for income taxes 1,255.8
1,007.7
248.1
24.6 % 28.7 % 30.4 %
Provision for income taxes 374.8
346.2
28.6
8.3 % 8.6 % 10.5 %
Net income attributable to MKHL $ 881.0
$ 661.5
$ 219.5
33.2 %



NM	~~Not meaningful.~~

other charges includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan and other restructuring initiatives, and costs recorded in connection with our acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited.

Total Revenue

Total revenue increased ~~$1.061 billion,~~$313 million, or ~~32.0%~~6.0%, to ~~$4.372~~$5.551 billion for ~~the fiscal year ended March 28, 2015,~~Fiscal 2020, compared to ~~$3.311~~$5.238 billion for ~~the fiscal year ended March 29, 2014,~~Fiscal 2019, which included net unfavorable foreign currency effects of ~~$76.5~~$45 million primarily related to the weakening of the Euro, the Chinese Renminbi, the British Pound and the Canadian Dollar against the U.S. Dollar in Fiscal ~~2015~~2020, as compared to Fiscal ~~2014.~~2019. On a constant currency basis, our total revenue increased by $1.137 billion, or 34.3%. The increase in our revenues was due to an increase in our comparable and non-comparable retail store sales and wholesale sales, as well as increases in our licensing revenue.

~~The following table details revenues for our three business segments (dollars in millions):~~

Fiscal Years Ended % Change
% of Total
Revenue
for Fiscal
2015

% of Total
Revenue
for Fiscal
2014
March 28,
2015 March 29,
2014 $ Change As Reported
Constant
Currency

Revenue:
Net sales: Retail $ 2,134.6
$ 1,593.0
$ 541.6
34.0 % 36.7 % 48.8 % 48.1 %
Wholesale 2,065.1
1,577.5
487.6
30.9 % 33.0 % 47.3 % 47.7 %
Licensing 171.8
140.3
31.5
22.4 % 22.4 % 3.9 % 4.2 %
Total revenue $ 4,371.5
$ 3,310.8
$ 1,060.7
32.0 % 34.3 %

~~Retail~~

~~Net sales from our retail stores increased $541.6~~$358 million, or ~~34.0%, to $2.135 billion~~6.8%. Total revenue for Fiscal ~~2015,~~2020 included approximately $723 million of incremental revenue attributable to Versace, which was acquired and consolidated into our results of operations effective December 31, 2018. The remaining decrease is attributable to lower Jimmy Choo and Michael Kors revenues, as compared to ~~$1.593 billion for Fiscal 2014,~~the prior year, which ~~included unfavorable foreign currency effects~~includes the adverse impact of ~~$43.0 million. On a constant currency basis, net sales from our retail stores increased $584.6 million, or 36.7%. We operated 526 retail stores, including concessions, as~~COVID-19.

Table of ~~March 28, 2015, compared to 405 retail stores, including concessions, as of March 29, 2014.~~Contents

Our comparable store sales increased $143.9 million, or 10.3%, during Fiscal 2015, which included unfavorable foreign currency effects of $22.5 million. On a constant currency basis, our comparable store sales increased $166.4 million, or 11.9%. The growth in our comparable store sales was primarily due to an increase in sales from our accessories product line during Fiscal 2015.

Our non-comparable store sales increased $397.7 million during Fiscal 2015, which included unfavorable foreign currency effects of $20.5 million. On a constant currency basis, our non-comparable store sales increased $418.2 million. This sales growth was primarily attributable to operating 121 additional stores since March 29, 2014 and sales from our e-commerce site.

~~Wholesale~~

Net sales to our wholesale customers increased $487.6 million, or 30.9%, to $2.065 billion for Fiscal 2015, compared to $1.578 billion for Fiscal 2014, which included unfavorable foreign currency effects of $33.5 million. On a constant currency basis, our wholesale net sales increased $521.1 million, or 33.0%. The increase in our wholesale net sales was primarily attributable to increased sales from our accessories and footwear product lines during Fiscal 2015, as we continue to enhance our presence in department and specialty stores by converting more doors to shop-in-shops. In addition, wholesale net sales increased due to the continuing expansion of our European operations, whose net sales grew by 65.7% from Fiscal 2015 to Fiscal 2014.

~~Licensing~~

Royalties earned on our licensing agreements increased $31.5 million, or 22.4%, to $171.8 million for Fiscal 2015, compared to $140.3 million for Fiscal 2014. The increase in licensing revenue was primarily due to royalties earned on licensing agreements related to the sales of watches, jewelry and winter outerwear.

Gross Profit

Gross profit increased ~~$631.6~~$91 million, or ~~31.3%~~2.9%, to ~~$2.648~~$3.271 billion during Fiscal ~~2015,~~2020, compared to ~~$2.016~~$3.180 billion for Fiscal ~~2014,~~2019, which included net unfavorable foreign currency effects of ~~$51.2~~$28 million. Gross profit as a percentage of total revenue ~~declined~~decreased 180 basis points to ~~60.6%~~58.9% during Fiscal ~~2015,~~2020, compared to ~~60.9%~~60.7% during Fiscal ~~2014. The decline in gross profit margin resulted from a decrease of 66 basis points in gross profit margin from our retail segment, which represents nearly half of our business.~~2019. The decrease in gross profit margin ~~from our retail segment~~ was primarily ~~due~~attributable to ~~an increase~~incremental inventory reserves of $92 million recorded in ~~markdowns~~connection with COVID-19 and ~~discounts, partially offset~~lower gross profit for Michael Kors primarily driven by ~~a more favorable product mix experienced~~increased markdowns during Fiscal ~~2015~~2020, as compared to Fiscal ~~2014. Wholesale~~2019, partially offset by the inclusion of Versace, which benefited our gross margin remained flat, as the favorable impact resulting from the increase on our European wholesale sales in proportion to total wholesale sales was offset by higher allowances in Fiscal 2015, as compared to Fiscal 2014.140 basis points.

Total Operating Expenses

Total operating expenses increased ~~$382.8 million,~~$1.018 billion, or ~~38.0%~~41.6%, to ~~$1.391~~$3.463 billion during Fiscal ~~2015,~~2020, compared to ~~$1.008~~$2.445 billion for Fiscal ~~2014.~~2019, which included incremental operating expenses of $472 million associated with the recently acquired Versace business. Our operating expenses included a net favorable foreign currency impact of approximately ~~$30.3~~$56 million. Total operating expenses as a percentage of total revenue increased to ~~31.8%~~62.4% in Fiscal ~~2015, as~~2020, compared to ~~30.4%~~46.7% in Fiscal ~~2014.~~2019. The ~~changes in our~~components that comprise total operating expenses are ~~further described below:~~detailed below.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased ~~$324.6~~$389 million, or ~~35.0%~~18.7%, to ~~$1.252~~$2.464 billion during Fiscal ~~2015,~~2020, compared to ~~$926.9 million~~$2.075 billion for Fiscal ~~2014.~~2019. The increase in selling, general and administrative expenses was primarily due to incremental costs of $421 million associated with the ~~following:~~

~~An increase~~recently acquired Versace business, which has been consolidated in ~~retail-related~~our operations beginning on December 31, 2018, increased retail store and e-commerce related costs ~~including salary~~and bad debt expense related to COVID-19, partially offset by decreased rent and occupancy ~~cost, of $180.1 million, primarily attributable to operating 526 retail stores versus 405 retail stores in the prior period;~~

~~an increase in corporate employee-related costs of $70.1 million, primarily due to an increase in our corporate staff to support our North American and international growth;~~

an increase in promotional costs (which consist of advertising, marketing and various promotional costs) of $25.9 million, primarily due to our continuing expansion into new markets, as well as social media during Fiscal 2015;

an increase in professional fees of $23.4 million, primarily comprised of legal and consulting fees incurred in connection with the relocation of our principal executive offices, as well as fees related to our new customer service call center in Fiscal 2015;

an increase in distribution expenses of $13.9 million, primarily due to increased shipments attributable to increased sales, as well incremental costs incurred to ensure timely delivery of our products to customers despite the aforementioned delays at the U.S. west coast ports; and

~~an increase in litigation-related costs of $3.6 million.~~expense.

Selling, general and administrative expenses as a percentage of total revenue increased to ~~28.6%~~44.4% during Fiscal ~~2015,~~2020, compared to ~~28.0%~~39.6% for Fiscal ~~2014,~~2019, primarily due to the ~~aforementioned~~inclusion of expenses associated with the Versace business, increased retail store and ~~overhead~~e-commerce related costs ~~as well as corporate operating~~and bad debt expense related to COVID-19 of $25 million.

Corporate unallocated expenses, ~~during~~which are included within selling, general and administrative expenses discussed above, but are not directly attributable to a reportable segment and exclude COVID-19 related charges, increased $59 million, or 63.4%, to $152 million in Fiscal ~~2015,~~2020 as compared to $93 million in Fiscal ~~2014. These increases were partially offset by our operating leverage achieved on other operating expenses, including selling and distribution~~2019, primarily attributable to the inclusion of ERP system implementation costs ~~as a percentage of total revenue.~~in the current year.

Depreciation and Amortization

Depreciation and amortization increased ~~$58.7~~$24 million, or ~~73.8%~~10.7%, to ~~$138.4~~$249 million during Fiscal ~~2015,~~2020, compared to ~~$79.7~~$225 million for Fiscal ~~2014,~~2019. The increase in depreciation and amortization expense was primarily attributable to incremental depreciation and amortization expenses of $51 million attributable to the Versace business (including amortization of purchase accounting adjustments), partially offset by lower depreciation due to ~~an increase in the build-out of our new retail stores, new shop-in-shop locations, increase in lease rights related to our new European stores,~~previously recorded property and ~~investments made in our information systems infrastructure to accommodate our growth.~~equipment impairment charges. Depreciation and amortization increased to ~~3.2%~~4.5% as a percentage of total revenue during Fiscal ~~2015,~~2020, compared to ~~2.4%~~4.3% for Fiscal ~~2014.~~2019.

Impairment of ~~Long-Lived~~ Assets

During Fiscal ~~2015~~2020, we recognized asset impairment charges of $708 million. The increase was primarily related to the impairment of operating lease right-of-use assets, as well as the impairment of Jimmy Choo goodwill and its brand intangible assets as part of our annual impairment assessments (see Note 14 to the accompanying consolidated financial statements for additional information). During Fiscal ~~2014,~~2019, we recognized asset impairment charges of approximately ~~$0.8~~$21 million, ~~and $1.3~~of which $17 million ~~respectively, on fixed assets~~ related to ~~two~~underperforming Michael Kors full-price retail store locations, some of which were closed as part of our ~~retail locations~~Michael Kors Retail Fleet Optimization Plan.

Restructuring and Other Charges

During Fiscal 2020, we recognized restructuring and other charges of $42 million, which included restructuring charges of $8 million, primarily related to our Michael Kors Retail Fleet Optimization Plan, and other costs of $34 million. The other costs recorded during Fiscal 2020 included $24 million related to the acquisition of Versace, $9 million in connection with the Jimmy Choo acquisition, and $1 million in connection with the acquisition of Gozzi. (see Note 11 to the accompanying consolidated financial statements for additional information).

Table of Contents

During Fiscal ~~2015~~2019, we recognized restructuring and ~~three retail locations in Fiscal 2014.~~other charges of $124 million, which included restructuring charges of $45 million, primarily associated with our Michael Kors Retail Fleet Optimization Plan and other costs of $79 million, $52 million of which related to the Versace acquisition and $27 million related to the Jimmy Choo acquisition.

(Loss) Income from Operations

As a result of the foregoing, income from operations ~~increased $248.8~~decreased $927 million, or ~~24.7%~~126.1%, to ~~$1.257 billion~~a loss from operations of $192 million during Fiscal ~~2015,~~2020, compared to ~~$1.008 billion~~income from operations of $735 million for Fiscal ~~2014, which included unfavorable foreign currency effects of $20.9 million.~~2019. Income from operations as a percentage of total revenue ~~declined~~decreased to ~~28.8% during~~(3.5)% in Fiscal ~~2015,~~2020, compared to ~~30.5%~~14.0% in Fiscal 2019. See Segment Information above for ~~Fiscal 2014.~~a reconciliation of our segment operating income to total operating income.

~~The following table details income from operations for our three business segments (dollars in millions):~~Interest expense, net

Fiscal Years Ended $ Change % Change
% of Net
Sales/
Revenue for
Fiscal 2015
% of Net
Sales/
Revenue for
Fiscal 2014

March 28,
2015

March 29,
2014

Income from Operations:
Retail $ 557.2
$ 467.3
$ 89.9
19.2 % 26.1 % 29.3 %
Wholesale 610.9
459.8
151.1
32.9 % 29.6 % 29.1 %
Licensing 88.9
81.1
7.8
9.6 % 51.8 % 57.8 %
Income from operations $ 1,257.0
$ 1,008.2
$ 248.8
24.7 % 28.8 % 30.5 %

~~Retail~~

~~Income from operations for our retail segment increased $89.9~~Interest expense, net decreased $20 million, or ~~19.2%~~52.6%, to ~~$557.2 million during Fiscal 2015, compared to $467.3~~$18 million for Fiscal ~~2014. Income from operations~~2020, as ~~a percentage of net retail sales~~compared to $38 million for ~~the retail segment declined by approximately 320 basis points to 26.1% during~~ Fiscal ~~2015. The decrease in retail income from operations as a percentage of net sales was~~2019, primarily due to ~~an increase in operating costs as~~ a ~~percentage~~reduction of interest expense related to cross-currency swaps associated with our net ~~retail sales of approximately 2.6%, as well as due to the decrease in gross profit margin, as previously discussed above,~~investment hedge during Fiscal ~~2015~~2020, as compared to Fiscal ~~2014. The increase in operating expenses as a percentage of net retail sales was~~2019, largely due to an increase in depreciation and amortization expense, primarily related to new stores and lease rights (key money), as well as increased retail store and overhead costs, and distribution expenses.

~~Wholesale~~

Income from operations for our wholesale segment increased $151.1 million, or 32.9%, to $610.9 million during Fiscal 2015, compared to $459.8 million for Fiscal 2014. Income from operations as a percentage of net wholesale sales increased approximately 50 basis points to 29.6%. This increase as a percentage of net sales was due to a net decrease in operating expenses as a percentage of net wholesale sales during Fiscal 2015 as compared to Fiscal 2014, which was primarily due to lower selling and distribution costs, reflecting our operating expense leverage, partially offset by increased ~~depreciation~~interest expense attributable to higher average borrowings outstanding in the current year (see Note 12 and ~~amortization expenses as a result of~~Note 15 to the ~~growth in our wholesale doors.~~

~~Licensing~~

~~Income from operations~~accompanying consolidated financial statements for our licensing segment increased $7.8 million, or 9.6%, to $88.9 million during Fiscal 2015, compared to $81.1 million for Fiscal 2014. Income from operations as a percentage of licensing revenue decreased approximately 600 basis points to 51.8%additional information). This decrease as a percentage of licensing revenue was due to an increase in operating expenses as a percentage of licensing revenues during Fiscal 2015, as compared to Fiscal 2014. This increase was largely due to increased advertising expenses, as well as certain administrative expenses incurred in connection with the formation of our new licensing operations in Europe during Fiscal 2015.

~~Other income~~

~~Other income was $1.6 million during Fiscal 2015, and was comprised of $1.5 million in income related to our anti-counterfeiting efforts and a gain of $0.1 million earned on our joint venture.~~

Foreign Currency Loss

We recognized a net foreign currency loss of ~~$2.6~~$11 million during Fiscal ~~2015, as compared to a foreign currency loss of $0.1 million during Fiscal 2014. The Fiscal 2015 loss was~~2020, primarily ~~related~~attributable to the revaluation and settlement of certain of our accounts payable in currencies other than the functional currency, ~~of the applicable reporting units,~~ as well as the ~~strengthening of the U.S. Dollar relative to the Euro and the Canadian Dollar, which impacted the re-measurement~~remeasurement of dollar-denominated intercompany loans with certain of our ~~subsidiaries. Such~~subsidiaries (see Note 15 to the accompanying consolidated financial statements for additional information).

We recognized a net foreign currency loss ~~was partially offset by net gains~~ of ~~$1.5~~$80 million during Fiscal 2019, primarily attributable to a $77 million loss related to ~~mark-to-market of our~~ forward foreign currency exchange derivative contracts ~~not designated as accounting hedges. The $0.1 million loss for Fiscal 2014 was primarily related~~to hedge the transaction price of the Versace acquisition (please refer to Note 15 to the ~~revaluation and settlement of certain of our accounts payable in currencies other than the functional currency of the applicable reporting units.~~accompanying consolidated financial statements for additional information).

Provision for Income Taxes

We recognized ~~$374.8~~$10 million of income tax expense during Fiscal ~~2015,~~2020, compared with ~~$346.2~~$79 million for Fiscal ~~2014.~~2019. Our effective tax rate for Fiscal ~~2015~~2020 was ~~29.8%~~(4.7)%, compared to ~~34.4%~~12.7% for Fiscal ~~2014.~~2019. The decrease in our ~~effective~~income tax ~~rate~~provision was primarily due to the ~~increase in taxable~~impact of a consolidated pre-tax loss as well as the impact of a release of income intax reserves during Fiscal 2020. The decrease was partially offset by the effects of valuation allowances established on a portion of our non-US deferred tax assets, a lower favorable effect of our global financing activities during Fiscal 2020, compared to Fiscal 2019, as well as non-tax deductible goodwill impairment impacts. The global financing activities are related to our previously disclosed 2014 move of our principal executive office from Hong Kong to the United Kingdom (“U.K.”) and decision to become a U.K. tax resident. In connection with this decision, we funded our international growth strategy through intercompany debt financing arrangements between certain of our ~~non-U.S.~~U.S., U.K. and Switzerland subsidiaries ~~(predominantly European operations) during Fiscal 2015, which are subject~~in December 2015. Accordingly, due to ~~lower~~the difference in the statutory income tax ~~rates. The Fiscal 2015~~rates between these jurisdictions, we realized a higher effective tax rate ~~was~~on the consolidated pre-tax loss.

Our effective tax rate may fluctuate from time to time due to the effects of changes in U.S. state and local taxes and tax rates in foreign jurisdictions. In addition, factors such as the geographic mix of earnings, enacted tax legislation and the results of various global tax strategies, may also ~~favorably impacted by the settlement of certain financial instruments~~impact our effective tax rate in ~~connection with our international income tax structuring.~~future periods.

Net (Loss) Income ~~attributable~~Attributable to ~~MKHL~~Capri

As a result of the foregoing, our net income ~~increased $219.5~~attributable to Capri decreased $766 million, or ~~33.2%~~141.1%, to ~~$881.0~~a net loss of $223 million during Fiscal ~~2015,~~2020, compared to ~~$661.5~~net income of $543 million for Fiscal ~~2014.~~2019.

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Segment Information

Versace


	Fiscal Years Ended
	March 28, 2020			March 30, 2019			$ Change
Revenues	$	843		$	137		$	706
Loss from operations	(8)			(11)			3
Operating margin	(0.9)		%	(8.0)		%

Revenues

Versace revenues increased $706 million to $843 million for Fiscal 2020, compared to $137 million for Fiscal 2019. Fiscal 2020 included incremental revenue of $723 million due to the inclusion of the Versace business acquired on December 31, 2018 for the entire Fiscal 2020 year. The remaining decrease in sales reflects the adverse impacts related to COVID-19.

Loss from Operations

During Fiscal 2020, we recorded a loss from operations of $8 million compared to a loss of $11 million for the period from the date of acquisition through March 30, 2019 (after amortization of non-cash purchase accounting adjustments). Operating margin in Fiscal 2020 was (0.9)% compared to (8.0)% for the period from the date of acquisition through March 30, 2019.

Jimmy Choo


	Fiscal Years Ended										% Change
	March 28, 2020			March 30, 2019			$ Change		As Reported		Constant Currency
Revenues	$	555		$	590		$	(35)	(5.9)	%	(5.1)	%
(Loss) income from operations	(13)			20			(33)		(165.0)	%
Operating margin	(2.3)		%	3.4		%

Revenues

Jimmy Choo revenues decreased $35 million, or 5.9% to $555 million for Fiscal 2020, compared to $590 million for Fiscal 2019, which included unfavorable foreign currency effects of $5 million. On a constant currency basis, revenue decreased $30 million, or 5.1%, primarily reflecting adverse impacts related to COVID-19.

(Loss) Income from Operations

During Fiscal 2020, Jimmy Choo recorded a loss from operation of $13 million compared to income from operations of $20 million for Fiscal 2019. Operating margin declined 570 basis points from 3.4% for Fiscal 2019, to (2.3)% for Fiscal 2020, primarily due to an increase in operating expenses, including retail store expenses, as well as investments in new stores, while also reflecting the adverse impacts related to COVID-19.

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Michael Kors


	Fiscal Years Ended										% Change
	March 28, 2020			March 30, 2019			$ Change		As Reported		Constant Currency
Revenues	$	4,153		$	4,511		$	(358)	(7.9)	%	(7.0)	%
Income from operations	850			964			(114)		(11.8)	%
Operating margin	20.5		%	21.4		%

Revenues

Michael Kors revenues decreased $358 million, or 7.9%, to $4.153 billion for Fiscal 2020, compared to $4.511 billion for Fiscal 2019, which included unfavorable foreign currency effects of $40 million. On a constant currency basis, revenue decreased $318 million, or 7.0%. The decrease in revenues was primarily due to lower sales of women's accessories and watches, and a decrease in comparable stores sales of $146 million partially related to the adverse effects of COVID-19. This decrease was partially offset by higher sales of women's footwear and men's accessories, as well as a 9% increase in e-commerce sales.

Income from Operations

Income from operations for our Michael Kors segment decreased $114 million, or 11.8%, to $850 million for Fiscal 2020, compared to $964 million for Fiscal 2019. Income from operations as a percentage of Michael Kors revenue decreased 90 basis points to 20.5% in Fiscal 2020, compared to 21.4% in Fiscal 2019, largely due to a decrease in gross profit margin, as previously discussed.

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Liquidity and Capital Resources

Liquidity

Our primary sources of liquidity are the cash flows generated from our operations, along with borrowings available under our credit ~~facility~~facilities (see below discussion regarding ~~“Senior Unsecured Revolving~~“Revolving Credit ~~Facility”~~Facilities”) and available cash and cash equivalents. Our primary use of this liquidity is to fund ~~our~~the ongoing cash requirements, including our working capital ~~requirements, global retail store construction, expansion~~needs and ~~renovation, expansion~~capital investments in our business, debt repayments, acquisitions, returns of ~~our distribution and corporate facilities, construction and renovation of shop-in-shops, investment in information systems infrastructure,~~capital including share repurchases and other corporate activities. We believe that the cash generated from our operations, together with borrowings available under our revolving credit ~~facility~~facilities and available cash and cash equivalents, will be sufficient to meet our working capital needs for the next 12 months, including investments made and expenses incurred in connection with our store growth plans, shop-in-shop growth, investments in corporate and distribution facilities, continued systems development, e-commerce and marketing ~~initiatives and acquisition of certain currently licensed operations in Asia.~~initiatives. We spent ~~$369.2~~$223 million on capital expenditures during Fiscal ~~2016,~~2020, and expect to spend approximately ~~$250.0~~$130 million during Fiscal ~~2017.~~2021. In response to the continued global health and economic impact of the COVID-19 pandemic, this represents a significant reduction to capital expenditures in Fiscal 2021. The majority of ~~these~~the Fiscal 2020 expenditures related to ~~the~~our retail ~~store openings which occurred during the year, with the remainder being used on investments made in connection with new shop-in-shops, the build-out of~~operations (including e-commerce), ERP system implementation and our corporate ~~offices and enhancements to our distribution, e-commerce, and other information systems infrastructure.~~offices.

The following table sets forth key indicators of our liquidity and capital resources (in millions):


	As of
	March 28, 2020		March 30, 2019
Balance Sheet Data:
Cash and cash equivalents	$	592	$	172
Working capital	$	493	$	187
Total assets	$	7,946	$	6,650
Short-term debt	$	167	$	630
Long-term debt	$	2,012	$	1,936

As of
April 2,
2016 March 28,
2015
Balance Sheet Data:
Cash and cash equivalents $ 702.0
$ 978.9
Working capital⁽¹⁾
$ 1,234.3
$ 1,663.4
Total assets $ 2,566.8
$ 2,684.6


	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
Cash Flows Provided By (Used In):
Operating activities	$	859	$	694	$	1,062
Investing activities	62		(2,125)		(1,533)
Financing activities	(497)		1,451		389
Effect of exchange rate changes	(4)		(11)		15
Net increase (decrease) in cash and cash equivalents	$	420	$	9	$	(67)

⁽¹⁾

As of March 28, 2015, previously classified as current deferred tax assets and liabilities of $27.7 million and $3.7 million, respectively, were reclassified to noncurrent in connection with our early adoption of Accounting Standards Update No. 2015-17, "~~Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes".~~ ~~See Note 2 to the accompanying consolidated financial statements for additional information.~~

Fiscal Years Ended
April 2,
2016 March 28,
2015 March 29,
2014
Cash Flows Provided By (Used In):
Operating activities $ 1,228.4
$ 857.9
$ 633.0
Investing activities (381.1 ) (388.4 ) (215.5 )
Financing activities (1,128.3 ) (434.7 ) 71.1
Effect of exchange rate changes 4.1
(27.1 ) (4.7 )
Net (decrease) increase in cash and cash equivalents $ (276.9 ) $ 7.7
$ 483.9

Cash Provided by Operating Activities

Cash provided by operating activities increased ~~$370.5~~$165 million to ~~$1.228 billion~~$859 million during Fiscal ~~2016,~~2020, as compared to ~~$857.9~~$694 million for Fiscal ~~2015.~~2019, which was primarily due to increases related to changes in our working capital, primarily attributable to decreased inventory purchases, as well as the timing of payments and receipts. The net increase in cash flows ~~from operating activities was primarily due~~also included decreases to ~~favorable changes in working capital, as well as an increase in~~ our net income after non-cash adjustments. The increase in working capital was largely attributable to: a favorable change in accounts receivable due to higher shipments at the end of Fiscal 2015, as well as improved cash collections; a favorable change in inventories also reflecting higher shipments at the end of Fiscal 2015, partially offset by increased inventory related to new retail stores and wholesale locations (including inventory to support our operations in Panama and South Korea); and increases in accounts payable and accrued expenses and other current liabilities primarily due to the timing of payments, in part due to the inclusion of the 53rd week in Fiscal 2016.

Cash provided by operating activities ~~increased $224.9~~decreased $368 million to ~~$857.9~~$694 million during Fiscal ~~2015,~~2019, as compared to ~~$633.0 million~~$1.062 billion for Fiscal ~~2014. The increase in cash flows from operating activities~~2018, which was primarily due to ~~an increase~~decreases related to changes in our working capital primarily attributable to increased inventory purchases as well as the timing of payments and receipts. The net decrease in cash flows also included decreases to our net income after non-cash adjustments, ~~as well as a favorable change on our inventory primarily attributable to the sell through of our inventory relative to purchases made during Fiscal 2015. These increases were~~ partially offset by ~~decreases related to changes~~an increase in ~~our accrued expenses and other current liabilities and accounts payable, as compared to Fiscal 2014, primarily due to timing~~tax-related long-term liabilities.

Table of ~~payments. The decline related to accrued expenses and other current liabilities was also due to the payment of certain non-U.S. current income tax liabilities during Fiscal 2015.~~Contents

Cash ~~Used in~~Provided by (Used in) Investing Activities

Net cash ~~used in~~provided by investing activities was ~~$381.1~~$62 million during Fiscal ~~2016,~~2020, as compared to net cash used in investing activities of ~~$388.4 million~~$2.125 billion during Fiscal ~~2015.~~2019. The ~~favorable change~~$2.187 billion increase in cash from investing activities was primarily attributable to $1.862 billion of cash paid, net of cash acquired, in connection with our Fiscal 2019 acquisition of the Versace business. The increase in cash was also due to a ~~$17.8~~$77 million ~~decline in cash used in connection~~realized loss related to an undesignated derivative contract during Fiscal 2019 associated with ~~lease rights (key money) for new stores, which was partially~~the Versace acquisition and the settlement of net investment hedges of $298 million during Fiscal 2020, partly offset by ~~a $13.0 million increase in~~higher capital expenditures ~~largely attributable~~of $42 million, due to higher spending related to the ~~build-out of our new retail stores~~ERP system implementation and ~~shop-in-shops, as well as investments in new information technology, distribution system enhancements,~~expenditures related to corporate ~~offices and various other improvements in our~~ infrastructure.

Net cash used in investing activities ~~was $388.4~~increased $592 million to $2.125 billion during Fiscal ~~2015,~~2019, compared to ~~net cash used in investing activities of $215.5 million~~$1.533 billion during Fiscal ~~2014.~~2018. The ~~increase~~decrease in cash ~~used~~was primarily attributable to a $460 million increase of cash paid, net of cash acquired, in ~~investing activities is primarily the result~~connection with our Fiscal 2019 acquisition of the ~~build-out~~Versace business, as compared to our acquisition of ~~our new retail stores, which were constructed~~the Jimmy Choo business during Fiscal ~~2015, shop-in-shops we installed~~2018. The decrease in cash was also due to a $77 million realized loss related to an undesignated derivative contract during Fiscal ~~2015,~~2019 associated with the Versace acquisition, as well as ~~certain technology initiatives undertaken during Fiscal 2015, which~~higher capital expenditures of $61 million, due to higher spending related to ~~distribution system enhancements~~build-outs for new and ~~various other improvements~~renovated retail stores and expenditures related to ~~our~~corporate infrastructure.

Cash (Used in) Provided by ~~(Used in)~~ Financing Activities

Net cash used in financing activities was ~~$1.128 billion during Fiscal 2016, compared to net cash used in financing activities of $434.7~~$497 million during Fiscal ~~2015. This decline in cash from financing activities was primarily attributable to increased cash payments of $657.1 million in connection with the repurchase of our ordinary shares,~~2020, as ~~well a $26.8 million decrease in proceeds from our share option arrangements.~~

~~Net cash used in financing activities was $434.7 million during Fiscal 2015,~~ compared to net cash provided by financing activities of ~~$71.1~~$1.451 billion during Fiscal 2019. The increase in cash used by financing activities of $1.948 billion was due to decreased debt borrowings of $2.038 billion, net of debt repayments, primarily attributable to higher term loan borrowings to finance the acquisition of Versace during Fiscal 2019, partially offset by a decrease of $105 million in cash payments to repurchase our ordinary shares during Fiscal 2020.

Net cash provided by financing activities increased $1.062 billion to $1.451 billion during Fiscal 2019, compared to $389 million during Fiscal ~~2014. This decline~~2018. The increase in cash from financing activities was due to increased debt borrowings of $908 million, net of debt repayments, primarily attributable to ~~increased~~higher term loan borrowings to finance the acquisition of Versace, as well as a decrease of $154 million in cash payments ~~of $492.9 million in connection with the~~to repurchase of our ordinary ~~shares, as well~~shares.

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Debt Facilities

The following table presents a ~~$13.1 million decrease in proceeds from our share option arrangements.~~

~~Revolving Credit Facilities~~

~~Senior Unsecured Revolving Credit Facility~~

On October 29, 2015, we entered into an amended and restated senior unsecured revolving credit facility ("2015 Credit Facility") with, among others, JPMorgan Chase Bank, N.A. ("JPMorgan Chase"), as administrative agent, which replaced our prior 2013 senior unsecured revolving credit facility ("2013 Credit Facility"). The Company and a U.S., Canadian, Dutch and Swiss subsidiary are the borrowers under the 2015 Credit Facility. The borrowers and certain of our material subsidiaries provide unsecured guaranteessummary of the ~~2015 Credit Facility. The 2015~~Company’s borrowing capacity and amounts outstanding as of March 28, 2020 and March 30, 2019 (dollars in millions):


	Fiscal Years Ended
	March 28, 2020			March 30, 2019
Senior Unsecured Revolving Credit Facility:
Revolving Credit Facility (excluding up to a $500 million accordion feature) ⁽¹⁾
Total Availability	$	1,000		$	1,000
Borrowings outstanding	681		(3)	539		⁽²⁾
Letter of credit outstanding	18			17
Remaining availability	$	301		$	444

Term Loan Facility ($1.6 billion)
Borrowings Outstanding, net of debt issuance costs ⁽³⁾	$	1,010		$	1,570
Remaining availability	$	—		$	—

4.000% Senior Notes
Borrowings Outstanding, net of debt issuance costs and discount amortization ⁽³⁾	$	446		$	445

Other Borrowings ⁽³⁾	$	3		$	1

Hong Kong Uncommitted Credit Facility:
Total availability (100 million Hong Kong Dollars)	$	14		$	13
Borrowings outstanding	—			—
Bank guarantees outstanding (4 million and 12 million Hong Kong Dollars)	1			2
Remaining availability	$	13		$	11

China Uncommitted Credit Facility:
Borrowings outstanding	$	—		$	—
Total and remaining availability (100 million Chinese Yuan)	$	14		$	14

Japan Credit Facility:
Borrowings outstanding	$	—		$	—
Total and remaining availability (1.0 billion Japanese Yen)	$	9		$	9

Versace Uncommitted Credit Facility:
Total availability (20 million Euro)	$	22		$	22
Borrowings outstanding (10 million Euro) ⁽²⁾	11			11

Remaining availability	$	11		$	11

Versace Uncommitted Credit Facilities:
Total availability (32 million Euro)	$	36		$	—
Borrowings outstanding (25 million Euro) ⁽²⁾	28			—
Remaining availability	$	8		$	—

Total borrowings outstanding⁽¹⁾	$	2,179		$	2,566
Total remaining availability	$	356		$	489

_____________________________

⁽¹⁾As of the last day of Fiscal 2020, the 2018 Credit Facility ~~provides for up to $1.0 billion in borrowings, which may be denominated in U.S. Dollars~~contained customary events of default and other currencies, including Euros, Canadian Dollars, Pounds Sterling, Japanese Yen and Swiss Francs. The 2015 Credit Facility also provides for the issuance of letters of credit of up to $75.0 million and swing line loans of up to $50.0 million. We have the ability to expand its borrowing availability under the 2015 Credit Facility by up to an additional $500.0 million, subject to the agreement of the participating lenders and certain other customary conditions. The 2015 Credit Facility expires on October 29, 2020.

Borrowings under the 2015 Credit Facility bear interest, at our option, at (i) for loans denominated in U.S. Dollars, an alternative base rate, which is the greater of the prime rate publicly announced from time to time by JPMorgan Chase, the greater of the federal funds effective rate or Federal Reserve Bank of New York overnight bank funding rate plus 50 basis points or the one-month London Interbank Offered Rate adjusted for statutory reserve requirements for Eurocurrency liabilities ("Adjusted LIBOR") plus 100 basis points, in each case, plus an applicable margin based on our leverage ratio; (ii) Adjusted LIBOR for the applicable interest period, plus an applicable margin based on our leverage ratio; (iii) for Canadian borrowings, the Canadian prime rate, which is the greater of the PRIMCAN Index rate or the rate applicable to one-month Canadian Dollar banker's acceptances quoted on Reuters ("CDOR") plus 100 basis points, plus an applicable margin based on our leverage ratio; or (iv) for Canadian borrowings, the average CDOR rate for the applicable interest period, plus an applicable margin based on our leverage ratio.

The 2015 Credit Facility also provides for an annual administration fee and a commitment fee equal to 0.10% to 0.175% per annum, based on our leverage ratio, applied to the average daily unused amount of the facility. Loans under the 2015 Credit Facility may be prepaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than customary "breakage" costs with respect to loans bearing interest based upon Adjusted LIBOR or the CDOR rate.

~~The 2015 Credit Facility requires~~required us to maintain a leverage ratio at the end of each fiscal quarter of no greater than ~~3.5~~3.75 to ~~1. Such leverage ratio is~~1, calculated asbased on the ratio of ~~the sum of~~consolidated total indebtedness asplus the capitalized amount of ~~the date of the measurement plus 6.0 times the~~all operating lease liabilities presented on our consolidated ~~rent expense for the last four consecutive fiscal quarters,~~balance sheets to Consolidated EBITDAR for the last four consecutive fiscal quarters. Consolidated EBITDAR is defined as consolidated net income plus income tax expense, net interest expense, depreciation and amortization expense, consolidated rent expense

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and other non-cash charges, subject to certain deductions. The ~~2015~~2018 Credit Facility also includes other customary covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash ~~dividends that are customary for financings of this type.~~dividends. As of ~~April 2, 2016,~~March 28, 2020 and March 30, 2019, we were in compliance with all covenants related to ~~this agreement.~~our agreements then in effect governing our debt.

~~The 2015 Credit Facility contains events~~⁽²⁾Recorded as short-term debt in our consolidated balance sheets as of ~~default customary~~March 28, 2020 and March 30, 2019.

⁽³⁾Recorded as long-term debt in our consolidated balance sheets as of March 28, 2020 and March 30, 2019, except for ~~financings~~the current portion of ~~this type, including but not limited to, payment defaults, material inaccuracy of representations~~$128 million and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy or insolvency, certain events under ERISA, material judgments, actual or asserted failure of any guaranty supporting the 2015 Credit Facility to be in full force and effect, and change of control. If such an event of default occurs, the lenders under the 2015 Credit Facility would be entitled to take various actions, including terminating the commitments and accelerating amounts$80 million, respectively, outstanding under the ~~2015~~2018 Term Loan Facility, which was recorded within short-term debt at March 28, 2020 and March 30, 2019.

We believe that our 2018 Credit Facility is adequately diversified with no undue concentration in any one financial institution. As of March 28, 2020, there were 26 financial institutions participating in the facility, with none maintaining a maximum commitment percentage in excess of 10%. We have no reason to believe that the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the 2018 Credit Facility.

As of April 2, 2016 and March 28, 2015, there were no borrowings outstanding under the 2015 Credit Facility or the prior 2013 Credit Facility. At April 2, 2016, stand-by letters of credit of $10.0 million were outstanding under the 2015 Credit Facility. At April 2, 2016, the amount available for future borrowings was $990.0 million.

~~Debt Obligations of MK Panama~~

~~During the second quarter of Fiscal 2016, we obtained controlling interest~~See Note 12 in MK Panama and began to consolidate its financial results into our operations. Our consolidated balance sheet as of April 2, 2016 includes MK Panama's long-term debt obligations of $2.3 million (see Notes 3 and 9 to the accompanying consolidated financial statements for ~~additional information).~~detailed information relating to our credit facilities and debt obligations.

Share Repurchase Program

The following table presents our treasury share repurchases during the fiscal years ended March 28, 2020 and March 30, 2019 (dollars in millions):


	Fiscal Years Ended
	March 28, 2020		March 30, 2019
Cost of shares repurchased under share repurchase program	$	100	$	200	⁽¹⁾
Fair value of shares withheld to cover tax obligations for vested restricted share awards	2		7
Total cost of treasury shares repurchased	$	102	$	207

Shares repurchased under share repurchase program	2,711,807		3,718,237
Shares withheld to cover tax withholding obligations	63,958		107,712
	2,775,765		3,825,949

_____________________________

⁽¹⁾The share-repurchase program expired on May 25, 2019.

On ~~October 30, 2014,~~August 1, 2019, our Board of Directors authorized a ~~$1.0 billion~~new $500 million share repurchase program, which ~~authorized the repurchase of our shares for a period of two years. On May 20, 2015, our Board of Directors authorized the repurchase of up~~was set to an additional $500.0 million under our existing share repurchase program and extended the program through May 2017. On November 3, 2015, our Board of Directors authorized a further increase in our share repurchase program of up to an additional $500.0 million of our ordinary shares and extended the program through March 2018. During Fiscal 2016 and Fiscal 2015, we repurchased 24,757,543 shares and 2,040,979 shares, respectively, at a cost of $1.150 billion and $136.9 million, respectively, under our current share-repurchase program through open market transactions.expire August 1, 2021. As of ~~April 2, 2016,~~March 28, 2020, the remaining availability under our share repurchase program was ~~$358.1~~$400 million. Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading restrictions under the our insider trading policy, and other relevant factors. This program may be suspended or discontinued at any time.

~~On November 14, 2014, we entered into a $355.0 million accelerated~~The share repurchase program ~~(the “ASR program”) with a major financial institution (the “ASR Counterparty”) to repurchase our ordinary shares. Under the ASR program, we paid $355.0 million~~was suspended on April 6, 2020 in response to the ~~ASR Counterparty~~continued global health and ~~received 4,437,516 of its ordinary shares from the ASR Counterparty, which represents 100%~~economic impact of the shares expected to be purchased pursuant to the ASR program, based on an initial share price determination. The ASR program also contained a forward contract indexed to our ordinary shares whereby additional shares would be delivered to us by January 29, 2015 (the settlement date) if the share price declined from the initial share price, limited to a stated share price “floor.” The total number of shares repurchased/acquired was determined on final settlement, with the additional shares reacquired based on the volume-weighted average price of our ordinary shares, less a discount, during the repurchase period, subject to aforementioned price floor. In January 2015, 280,819 additional shares were delivered to us pursuant to these provisions, which did not require any additional cash outlay. The ASR program was accounted for as a treasury stock repurchase, reducing the number of ordinary shares outstanding by 4,718,335 shares.

We also have in place a “withhold to cover” repurchase program, which allows us to withhold ordinary shares from certain executive officers to satisfy minimum tax withholding obligations relating to the vesting of their restricted share awards. During Fiscal 2016 and Fiscal 2015, we withheld 54,875 shares and 40,787 shares, respectively, at a cost of $2.4 million and $3.4 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.

On May 25, 2016, our Board of Directors authorized a new $1.0 billion share repurchase program, which replaced the remaining balance of the previous share repurchase program authorized on October 30, 2014.COVID-19 pandemic.

Contractual Obligations and Commercial Commitments

As of ~~April 2, 2016,~~March 28, 2020, our ~~lease~~commercial commitments and contractual obligations were as follows (in millions):


Fiscal Years Ending	Fiscal 2021		Fiscal 2022-2023		Fiscal 2024-2025		Fiscal 2026 and thereafter		Total
Operating leases	$	489	$	801	$	551	$	566	$	2,407
Inventory Purchase Obligations	570		—		—		—		570
Other commitments	58		20		3		—		81
Short-term debt	167		—		—		—		167
Long-term debt	—		192		1,820		—		2,012
Total	$	1,284	$	1,013	$	2,374	$	566	$	5,237

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Fiscal Years Ending
Fiscal
2017

Fiscal
2018-2019

Fiscal
2020-2021

Fiscal
2022 and
Thereafter
Total
Operating leases $ 220.7
$ 438.5
$ 420.0
$ 746.7
$ 1,825.9
Inventory Purchase Obligations 549.0
—
—
—
549.0
Other commitments 45.4
3.8
—
—
49.2
Long-term debt —
0.1
1.2
1.0
2.3
Total $ 815.1
$ 442.4
$ 421.2
$ 747.7
$ 2,426.4

Operating lease obligations represent our equipment leases and the minimum lease rental payments under non-cancelable operating leases for our real estate locations globally. In addition to the above amounts, we are typically required to pay real estate taxes, contingent rent based on sales volume and other occupancy costs relating to our leased properties for our retail stores.

Inventory purchase obligations represent our contractual agreements relating to future purchases of inventory.

Other commitments include our non-cancelable contractual obligations related to ~~our new European distribution center,~~ marketing and advertising agreements, information technology agreements, and supply agreements.

Excluded from the above commitments is ~~$18.5~~$99 million of long-term liabilities related to net uncertain tax positions, due to the uncertainty of the time and nature of resolution.

The above table also excludes ~~amounts included in~~ current liabilities ~~in our consolidated balance sheet~~(other than short-term debt) recorded as of ~~April 2, 2016,~~March 28, 2020, as these items will be paid within one year, and non-current liabilities that have no cash outflows associated with them (e.g., deferred taxes).

Off-Balance Sheet Arrangements

We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. In addition to the commitments in the above table, our off-balance sheet commitments relating to our outstanding letters of credit were ~~$10.6~~$24 million at ~~April 2, 2016,~~March 28, 2020, including ~~$0.6~~$6 million in letters of credit issued outside of the ~~2015~~2018 Credit Facility. In addition, as of March 28, 2020, bank guarantees of approximately $18 million were supported by our Versace Credit Facility. We do not have any other off-balance sheet arrangements or relationships with entities that are not consolidated into our financial statements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

Effects of Inflation

We do not believe that our sales or operating results have been materially impacted by inflation during the periods presented in our financial statements. However, we may experience an increase in cost pressure from our suppliers in the future, which could have an adverse impact on our gross profit results in the periods effected.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to certain market risks during the normal course of our business, such as risk arising from fluctuations in foreign currency exchange rates, as well as fluctuations in interest rates. In attempts to manage these risks, we employ certain strategies to mitigate the effect of these fluctuations. We enter into foreign currency forward contracts to manage our foreign currency exposure to the fluctuations of certain foreign currencies. The use of these instruments primarily helps to manage our exposure to our foreign purchase commitments and better control our product costs. We do not use derivatives for trading or speculative purposes.

Foreign Currency Exchange Risk

Forward Foreign Currency Exchange Contracts

We are exposed to risks on certain purchase commitments to foreign suppliers based on the value of our purchasing ~~subsidiaries~~subsidiaries’ local currency relative to the currency requirement of the supplier on the date of the commitment. As such, we enter into forward currency exchange contracts that generally mature in 12 months or less and are consistent with the related purchase ~~commitments.~~commitments, to manage our exposure to the changes in the value of the Euro and the Canadian Dollar. These contracts are recorded at fair value in our consolidated balance sheets as either an asset or liability, and are derivative contracts to hedge cash flow risks. Certain of these contracts are designated as hedges for hedge accounting purposes, while certain of these contracts, ~~currently a relatively small portion,~~ are not designated as hedges for accounting purposes. Accordingly, the changes in the fair value of the majority of these contracts at the balance sheet date are recorded in our equity as a component of accumulated other comprehensive income (loss), and upon maturity (settlement) are recorded in, or reclassified into, our cost of sales or operating expenses, in our consolidated statement of operations and comprehensive income, as applicable to the transactions for which the forward currency exchange contracts were established. ~~For those contracts which are designated as hedges for accounting purposes, any portion~~

Table of ~~those contracts deemed ineffective would be charged to earnings, in the period the ineffectiveness was determined.~~Contents

We perform a sensitivity analysis on our forward currency contracts, both designated and not designated as hedges for accounting purposes, to determine the effects of fluctuations in foreign currency exchange rates. For this sensitivity analysis, we assume a hypothetical change in U.S. Dollar against foreign exchange rates. Based on all foreign currency exchange contracts outstanding as of ~~April 2, 2016,~~March 28, 2020, a 10% appreciation or devaluation of the U.S. Dollar compared to the level of foreign currency exchange rates for currencies under contract as of ~~April 2, 2016,~~March 28, 2020, would result in a net increase and decrease, respectively, of approximately ~~$20~~$15 million in the fair value of these contracts.

Net Investment Hedge

We are exposed to adverse foreign currency exchange rate movements related to interest from our net investment hedge. As of March 28, 2020, the net investment hedge has an aggregate notional amount of $44 million to hedge our net investments in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between the U.S. Dollar and this currency. Under the terms of this contract, which matures November 2024, we will exchange the semi-annual fixed rate payments made under our Senior Notes for fixed rate payments of 0.89% in Japanese Yen. Based on the net investment hedge outstanding as of March 28, 2020, a 10% appreciation or devaluation of the U.S. Dollar compared to the level of foreign currency exchange rates for currencies under contract as of March 28, 2020, would result in a potential net increase or decrease upon settlement of approximately $5 million in the fair value of this contract, which matures in 4 years.

Interest Rate Risk

We are exposed to interest rate risk in relation to borrowings outstanding under our ~~2015~~2018 Term Loan Facility, our 2018 Credit ~~Facility.~~Facility, our Hong Kong Credit Facility, our Japan Credit Facility and our Versace Credit Facilities. Our ~~2015~~2018 Term Loan Facility carries interest at a rate that is based on LIBOR. Our 2018 Credit Facility carries interest rates that are tied to LIBOR and the prime rate, among other institutional lending rates (depending on the particular origination of borrowing), ~~and therefore~~as further described in Note 12 to the accompanying consolidated financial statements. Our Hong Kong Credit Facility carries interest at a rate that is tied to the Hong Kong Interbank Offered Rate. Our China Credit Facility carries interest at a rate that is tied to the People’s Bank of China’s Benchmark lending rate. Our Japan Credit Facility carries interest at a rate posted by the Mitsubishi UFJ Financial Group. Our Versace Credit Facility carries interest at a rate set by the bank on the date of borrowing that is tied to the European Central Bank. Therefore, our statements of operations and comprehensive income and cash flows are exposed to changes in those interest rates. At ~~April 2, 2016 and~~ March 28, ~~2015, there were no balances~~2020, we had $681 million in long-term borrowings outstanding onunder our ~~2015~~2018 Credit Facility, or$1.010 billion, net of debt issuance costs, outstanding under our ~~prior 2013~~2018 Term Loan Facility and $39 million outstanding under our Versace Credit Facilities. At March 30, 2019, we had $539 million in short-term borrowings outstanding under our 2018 Credit Facility, ~~which is~~$1.570 billion, net of debt issuance costs, outstanding under our 2018 Term Loan Facility and $11 million outstanding under our Versace Credit Facility. These balances are not indicative of future balances that may be outstanding under ~~the 2015 Credit Facility~~our revolving credit facilities that may be subject to fluctuations in interest rates. Any increases in the applicable interest rate(s) would cause an increase to the interest expense ~~on our 2015 Credit Facility~~ relative to any outstanding balance at that date.

Credit Risk

We have outstanding $450 million aggregate principal amount of Senior Notes due in 2024. The Senior Notes bear interest at a fixed rate equal to 4.000% per year, payable semi-annually. Our Senior Notes interest rate payable may be subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency), downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes.

Item 8. Financial Statements and Supplementary Data

The response to this item is provided in this Annual Report on Form 10-K under Item 15. “Exhibits and Financial Statement Schedule” and is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

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Item 9A. Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, our principal executive officer and principal financial officer, respectively, of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a - 15(e) and 15(d) - 15(e) under the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”)) as of ~~April 2, 2016.~~March 28, 2020. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures are effective as of ~~April 2, 2016 are effective.~~March 28, 2020.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined under the Exchange Act Rule 13a-15 (f)) to provide reasonable assurance regarding the reliability of financial reporting and that the consolidated financial statements have been prepared in accordance with ~~accounting principles generally accepted in the United States ("~~U.S. ~~GAAP").~~GAAP. Such internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets; (ii) provide reasonable assurance (A) that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors; and (B) regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our management assessed the effectiveness of our internal control over financial reporting as of ~~April 2, 2016.~~March 28, 2020. In making this assessment, it used the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the 2013 Framework. Based on this assessment, management has determined that, as of ~~April 2, 2016,~~March 28, 2020, our internal control over financial reporting is effective based on those criteria.

The Company’s internal control over financial reporting as of ~~April 2, 2016,~~March 28, 2020, as well as the consolidated financial statements, have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein. The audit report appears on page 5561 of this report.

Changes in Internal Control over Financial Reporting

~~There~~Except as discussed below, there have been no changes in our internal control over financial reporting during the ~~quarter~~three months ended ~~April 2, 2016,~~March 28, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

COVID-19

In addition to the changes discussed below, we have experienced varying degrees of business disruptions related to the COVID-19 pandemic, including periods of closures of our stores, distribution centers and corporate facilities beginning during the fourth quarter of Fiscal 2020. In addition, we have temporarily furloughed a significant portion of our store employees and are requiring our corporate employees in affected regions to work remotely. Despite such actions, we have not experienced any material changes to our internal controls over financial reporting. We will continue to evaluate and monitor the impact of the COVID-19 pandemic on our internal controls. See Item 1A — "Risk Factors — The COVID-19 pandemic could have a material adverse effect on our business and results of operations" for additional discussion regarding risks to our business associated with the COVID-19 pandemic.

Leases

In the first quarter of Fiscal 2020, we implemented additional internal controls in connection with our adoption of ASU 2016-02, Leases (Topic 842), none of which materially affected our internal control over financial reporting.

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Item 9B. Other Information

The Company previously disclosed that in connection with the Michael Kors Retail Fleet Optimization Plan, it expected to incur approximately $100 - $125 million of one-time costs, including lease termination and other store closure costs. The Company closed a total of 143 Michael Kors stores at a cost of $99 million since plan inception, with total costs in line with its original expectations. As of the end of Fiscal 2020, the previously disclosed Michael Kors Retail Fleet Optimization is completed.

On July 7, 2020, the Board of Directors of the Company approved a retail optimization program (the “Capri Retail Store Optimization Program”) to improve the profitability of its retail store fleet. As part of the Capri Retail Store Optimization Program, the Company intends to close approximately 170 of its retail stores over the next two fiscal years (Fiscal 2021 and Fiscal 2022). In addition, in connection with the Capri Retail Store Optimization Program, the Company expects to incur approximately $75 million of one-time costs, including lease termination and other store closure costs, the majority of which are expected to result in future cash expenditures.

The exact amounts and timing of the Capri Retail Optimization Program charges and future cash expenditures associated therewith are undeterminable at this time. The Company will either disclose in a Current Report on Form 8-K, or disclose in another periodic filing with the U.S. Securities and Exchange Commission, the amount of any material charges relating to the Capri Retail Optimization Program by major type of cost once such amounts or range of amounts are determinable.

This disclosure is intended to satisfy the requirements of Item 2.05 of Form 8-K.

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Part III

Item 10. Directors, Executive Officers and Corporate Governance

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~June 2016,~~July 2020, which is incorporated herein by reference.

Item 11. Executive Compensation

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~June 2016,~~July 2020, which is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information as of ~~April 2, 2016~~March 28, 2020 regarding compensation plans under which the Company’s equity securities are authorized for issuance:


Equity Compensation Plan Information
	(a)	(b)			(c)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders ⁽¹⁾	6,697,026	$	46.99	⁽²⁾	2,686,919
Equity compensation plans not approved by security holders ⁽³⁾	457,925	$	4.57	⁽²⁾	—
Total	7,154,951	$	44.28	⁽²⁾	2,686,919

Equity Compensation Plan Information
(a) (b) (c)
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders ⁽¹⁾
5,115,065
$ 52.40
⁽²⁾
9,211,143
Equity compensation plans not approved by security holders ⁽³⁾
2,746,409
$ 5.61
⁽²⁾
—
Total 7,861,474
$ 36.05
⁽²⁾
9,211,143


⁽¹⁾	~~Reflects share options, restricted shares and restricted share units issued under the Michael Kors Holdings Limited Omnibus Incentive Plan.~~


⁽²⁾	~~Represents the weighted average exercise price of outstanding share awards only.~~

⁽³⁾

Reflects share options issued under the Amended and Restated Michael Kors (USA), Inc. Stock Option Plan (the “Option Plan”). Prior to our initial public offering, we granted share options to purchase ordinary shares to our executive officers and other eligible employees pursuant to the terms of the Option Plan. All of the share options granted under the Option Plan are ten-year share options and vest in full at the end of the ten-year term if our shareholder net equity has increased by at least 20% per annum during such ten-year period. However, a portion of each share option is eligible to vest on an accelerated basis over the course of five years with 20% vesting each year if the pre-established annual performance goal for the year has been met, in each case, subject to the grantee’s continued employment through the vesting date. The annual performance goals are tied to annual divisional pre-tax profit as determined by the Board. As of April 2, 2016, there were no shares available for future issuance under the 2008 Plan.

⁽¹⁾Reflects share options and restricted share units issued under the Company’s Amended and Restated Omnibus Incentive Plan.

⁽²⁾Represents the weighted average exercise price of outstanding share awards only.

⁽³⁾Reflects share options issued under the Company’s Amended and Restated Stock Option Plan (the “Option Plan”), which was in effect prior to our initial public offering. As of March 28, 2020, there were no shares available for future issuance under the Option Plan.

Item 13. Certain Relationships, Related Transactions and Director Independence

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~June 2016,~~July 2020, which is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~June 2016,~~July 2020, which is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules


~~(a)~~	~~The following documents are filed as part of this annual report on Form 10-K:~~


1.	~~The following consolidated financial statements listed below are filed as a separate section of this Annual Report on Form 10-K:~~

(a)The following documents are filed as part of this annual report on Form 10-K:

1.The following consolidated financial statements listed below are filed as a separate section of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm - Ernst & Young LLP.

Consolidated Balance Sheets as of ~~April 2, 2016~~March 28, 2020 and March ~~28, 2015.~~30, 2019.

Consolidated Statements of Operations and Comprehensive (Loss) Income for the fiscal years ended ~~April 2, 2016,~~ March 28, ~~2015~~2020, March 30, 2019 and March ~~29, 2014.~~31, 2018.

Consolidated Statements of Shareholders’ Equity for the fiscal years ended ~~April 2, 2016,~~ March 28, ~~2015~~2020, March 30, 2019 and March ~~29, 2014.~~31, 2018.

Consolidated Statements of Cash Flows for the fiscal years ended ~~April 2, 2016,~~ March 28, ~~2015~~2020, March 30, 2019 and March ~~29, 2014.~~31, 2018.

Notes to Consolidated Financial Statements for the fiscal years ended ~~April 2, 2016,~~ March 28, ~~2015~~2020, March 30, 2019 and March ~~29, 2014.~~31, 2018.

2.Exhibits:

EXHIBIT INDEX


2.Exhibit No.			~~Exhibits:~~

~~EXHIBIT INDEX~~

Document Description
2.1		Share Purchase Agreement dated as of May 31, 2016, by and among Michael Kors (Europe) B.V., Michael Kors (HK) Limited, Michael Kors Far East Trading Limited and Sportswear Holdings Limited (included as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-35368), filed on June 1, 2016 and incorporated herein by reference).
~~Exhibit~~ ~~No.~~ 2.2		~~Document Description~~Cooperation Agreement, dated as of July 25, 2017, by and among Michael Kors Holdings Limited, JAG Acquisitions (UK) Limited and Jimmy Choo Group Limited (formerly known as Jimmy Choo PLC) (included as Exhibit 2.2 to the Company's Current Report on Form 8-K (File No. 001-35368), filed on July 25, 2017 and incorporated herein by reference).
~~3.1~~ 2.3		Rule 2.7 Announcement, dated as of July 25, 2017 (included as Exhibit 2.1 to the Company's Current Report on Form 8-K (File No. 001-35368), filed on July 25, 2017 and incorporated herein by reference).
2.4		Stock Purchase Agreement, dated as of September 24, 2018, by and among Allegra Donata Versace Beck, Donatella Versace, Santo Versace, Borgo Luxembourg S.À R.L., Blackstone GPV Capital Partners (Mauritius) VI-D FDI Ltd., Blackstone GPV Tactical Partners (Mauritius)-N Ltd. and Capri Holdings Limited (f/k/a Michael Kors Holdings Limited) (included as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-35368), filed on September 25, 2018 and incorporated herein by reference).
3.1		Amended and Restated Memorandum and Articles of Association of ~~Michael Kors~~Capri Holdings Limited (included as Exhibit ~~99.3~~3.1 to the Company’s Current Report on Form ~~6-K~~8-K filed on ~~February 14, 2012,~~December 31, 2018 and incorporated herein by reference).
4.1		Specimen of Ordinary Share Certificate of ~~Michael Kors~~Capri Holdings ~~Limited (included as Exhibit 4.1 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011, and incorporated herein by reference).~~Limited.
4.2		Amended and Restated Credit Agreement, dated as of October 29, 2015, by and among Michael Kors (USA), Inc., as borrower and guarantor, Michael Kors Holdings Limited, as borrower and guarantor, the Foreign Subsidiary Borrowers from time to time party thereto, certain other subsidiaries of Michael Kors Holdings Limited from time to time party thereto as Guarantors, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Co-Syndication Agent, Citibank, N.A., as Co-Syndication Agent, Bank of America, N.A., as Co-Documentation Agent, and U.S. Bank National Association, as Co-Documentation Agent. (included as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 26, 2015 filed on February 3, 2016, and incorporated herein by reference).
~~4.3~~	Shareholders Agreement, dated as of July 11, 2011, among Michael Kors Holdings Limited and certain shareholders of Michael Kors Holdings Limited (included as Exhibit 10.2 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011 and incorporated herein by reference).
~~10.1~~ 4.3		Indenture, dated as of October 20, 2017, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (included as Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 001-35368), filed on October 20, 2017 and incorporated herein by reference).
10.1		Second Amendment, dated as of June 25, 2020, to the Third Amended and Restated Credit Agreement dated as of November 15, 2018 among Capri Holdings Limited, Michael Kors (USA), Inc., the foreign subsidiary borrowers party thereto, the guarantors party thereto, the financial institutions party thereto as lenders and issuing banks and JPMorgan Chase Bank, N.A., as administrative agent (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35368), filed on July 1, 2020 and incorporated herein by reference).
10.2		Form of Indemnification Agreement between Michael Kors Holdings Limited and its directors and executive officers (included as Exhibit 10.5 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011 and incorporated herein by reference).
~~10.2~~	Licensing Agreement, dated as of April 1, 2011, between Michael Kors, L.L.C. and Michael Kors (HK) Limited (included as Exhibit 10.6 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011, and incorporated herein by reference). (Certain portions of this exhibit were omitted pursuant to a confidential treatment request. Omitted information was filed separately with the Securities and Exchange Commission.)
~~10.3~~	Licensing Agreement, dated as of April 1, 2011, between Michael Kors, L.L.C. and Michael Kors Trading Shanghai Limited (included as Exhibit 10.7 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011, and incorporated herein by reference). (Certain portions of this exhibit were omitted pursuant to a confidential treatment request. Omitted information was filed separately with the Securities and Exchange Commission).

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Exhibit No.		Document Description
~~10.4~~ 10.3		Amended and Restated Michael Kors (USA), Inc. Stock Option Plan (included as Exhibit 10.4 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011 and incorporated herein by reference).
~~10.5~~ 10.4		Amended No. 1 to the Amended and Restated Michael Kors (USA), Inc. Share Option ~~Plan.~~Plan (included as Exhibit 4.9 to the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2012, filed on June 12, 2012 and incorporated herein by reference).
~~10.6~~ 10.5		~~Michael Kors Holdings Limited~~ Amended and Restated Omnibus Incentive Plan (included as Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A (File No. ~~001-35368~~)001-35368), filed on June 16, 2015 and incorporated herein by reference).
~~10.7~~ 10.6		~~Second~~Third Amended and Restated Employment Agreement, dated as of ~~May 20, 2015, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited and Michael Kors (included as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended~~ March 28, ~~2015, filed on May 27, 2015, and incorporated herein by reference).~~
~~10.8~~	~~Second Amended and Restated Employment Agreement, dated as of May 20, 2015,~~2018, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited and John D. Idol (included as Exhibit 10.8 to the ~~Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015, and incorporated herein by reference).~~
~~10.9~~	~~Amended and Restated Employment Agreement, dated as of May 23, 2013, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited and Joseph B. Parsons (included as Exhibit 10.9 to the~~ Company’s Annual Report on Form 10-K for the fiscal year ended March ~~30, 2013~~31, 2018, filed on May ~~29, 2013,~~30, 2018 and incorporated herein by reference).
~~10.10~~ 10.7		~~Michael Kors Holdings Limited~~ Executive Bonus Program (included as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2013 filed on August 6,8, 2013 and incorporated herein by reference).
~~10.11~~ 10.8		Employment Agreement, dated as of May 12, 2014, by and between Michael Kors (USA), Inc., and Cathy Marie ~~Robison~~Robinson (included as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 29, 2014 filed on May 28, 2014 and incorporated herein by reference).
~~10.12~~ 10.9		Employment Agreement, dated as of July 14, 2014, by and between Pascale Meyran and Michael Kors (USA), Inc. (included as Exhibit 10.14 to the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.13~~ 10.10		Form of Employee Non-Qualified Option Award Agreement (included as Exhibit 10.15 to the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.14~~ 10.11		Form of Employee Restricted Share Unit Award Agreement (included as Exhibit 10.16 to the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.15~~ 10.12		Form of Performance-Based Restricted Share Unit Award Agreement (included as Exhibit 10.17 to the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.16~~ 10.13		Form of Independent Director Restricted Share Unit Award Agreement (included as Exhibit 10.18 to the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.17~~ 10.14		Aircraft Time Sharing Agreement, dated November 24, 2014, by and between Michael Kors (USA), Inc. and John Idol (included as Exhibit 10.19 to the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.18~~ 10.15		~~Aircraft Time Sharing~~Employment Agreement, dated ~~December 12, 2014,~~as of April 17, 2017, by and ~~between~~among Michael Kors (USA), Inc. ~~and~~, Michael Kors ~~(included~~Holdings Limited and Thomas J. Edwards, Jr. (including as Exhibit ~~10.20~~10.19 to the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended ~~March 28, 2015,~~April 1, 2017, filed on May ~~27, 2015,~~31, 2017 and incorporated herein by reference).
~~21.1~~ 10.16		Agreement and General Release between Pascale Meyran and Michael Kors (USA), Inc., dated July 9, 2019 (included as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No. 001-35368), filed on November 7, 2019 and incorporated herein by reference).
10.17		Capri Holdings Limited Deferred Compensation Plan (included as Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001.35368), filed on November 14, 2019 and incorporated herein by reference).
10.18		Employment Agreement between Michael Kors (USA), Inc. and Krista McDonough made as of October 1, 2016.
21.1		List of subsidiaries of ~~Michael Kors~~Capri Holdings Limited.
23.2		Consent of Ernst & Young LLP.
31.1		Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1		Interactive Data Files.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant ~~hereby certifies that it meets all of the requirements for filing on Form 10-k and that it~~ has duly caused ~~and authorized~~this report to be signed on its behalf by the undersigned, ~~to sign this report on its behalf.~~thereunto duly authorized.

Date: ~~June 1, 2016~~July 8, 2020



			~~MICHAEL KORS~~CAPRI HOLDINGS LIMITED
			By:			/s/ John D. Idol
			Name:			John D. Idol
			Title:			Chairman & Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



By:
~~By:~~	~~/s/ Michael Kors~~	~~Honorary Chairman, Chief Creative Officer and Director~~	~~June 1, 2016~~
	~~Michael Kors~~
~~By:~~	/s/ John D. Idol	Chairman, Chief Executive Officer and Director (Principal Executive Officer)		~~June 1, 2016~~July 8, 2020
			John D. Idol
By:			/s/ ~~Joseph B. Parsons~~Thomas J. Edwards, Jr.		Chief Financial Officer and Chief Operating Officer ~~and Treasurer~~ (Principal Financial and Accounting Officer)	~~June 1, 2016~~July 8, 2020
			~~Joseph B. Parsons~~Thomas J. Edwards Jr.
By:			/s/ M. William Benedetto		Director	~~June 1, 2016~~July 8, 2020
			M. William Benedetto
By:			/s/ Robin Freestone		Director	July 8, 2020
			Robin Freestone
By:			/s/ Judy Gibbons		Director	July 8, 2020
			Judy Gibbons
By:			/s/ Ann Korologos		Director	July 8, 2020
			Ann Korologos
By:			/s/ Stephen F. Reitman		Director	~~June 1, 2016~~July 8, 2020
			Stephen F. Reitman
By:			/s/ ~~Ann McLaughlin Korologos~~Jane Thompson		Director	~~June 1, 2016~~July 8, 2020
			~~Ann McLaughlin Korologos~~Jane Thompson
By:			/s/ Jean Tomlin		Director	~~June 1, 2016~~July 8, 2020
			Jean Tomlin
~~By:~~	~~/s/ Judy Gibbons~~	~~Director~~	~~June 1, 2016~~
	~~Judy Gibbons~~
~~By:~~	~~/s/ Jane Thompson~~	~~Director~~	~~June 1, 2016~~
	~~Jane Thompson~~

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors ~~and Shareholders~~ of ~~Michael Kors~~Capri Holdings Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ~~Michael Kors~~Capri Holdings Limited and subsidiaries (“the Company”) as of ~~April 2, 2016~~March 28, 2020 and March ~~28, 2015,~~30, 2019, and the related consolidated statements of operations and comprehensive (loss) income, ~~shareholders'~~shareholders’ equity and cash flows for each of the three years in the period ended ~~April 2, 2016. These~~March 28, 2020, and the related notes (collectively referred to as the “consolidated financial ~~statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.~~

~~We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States)~~statements”). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements ~~referred to above~~ present fairly, in all material respects, the ~~consolidated~~ financial position of ~~Michael Kors Holdings Limited and subsidiaries~~the Company at ~~April 2, 2016~~March 28, 2020 and March ~~28, 2015,~~30, 2019, and the ~~consolidated~~ results of ~~their~~its operations and ~~their~~its cash ~~flows~~flow for each of the three years in the period ended ~~April 2, 2016,~~March 28, 2020, in conformity with the U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), ~~Michael Kors Holdings Limited’s~~the Company’s internal control over financial reporting as of ~~April 2, 2016,~~March 28, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated ~~June 1, 2016~~July 8, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No. 2016-02

As discussed in Note 2 and Note 4 to the consolidated financial statements, the Company changed its method of accounting for leases in the fiscal year ended March 28, 2020 due to the adoption of ASU No. 2016-02, Leases and associated amendments (Topic 842). See below for discussion of our related critical audit matter.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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						Valuation of Goodwill and Indefinite-lived Intangible Assets
Description of the Matter						At March 28, 2020, the Company’s goodwill and indefinite-lived intangible assets, consisting of brand names, totaled $1.5 billion and $1.3 billion, respectively. As discussed in Note 2 to the consolidated financial statements, goodwill and indefinite-lived intangible assets are assessed for impairment on an annual basis, or whenever impairment indicators exist. During Fiscal 2020, the Company recognized a goodwill impairment charge of $171 million associated with two of its Jimmy Choo reporting units. The Company also recognized an impairment charge of $180 million associated with the Jimmy Choo indefinite-lived brand name intangible asset. Auditing the Company’s annual impairment assessments was complex and highly judgmental due to the significant estimation required in determining the fair value of the reporting units for goodwill and the fair value of indefinite-lived brand name intangible assets. In particular, the fair value estimates were sensitive to significant assumptions, such as changes in the discount rate, revenue growth rate, margin and royalty rates, which are affected by expectations about future market or economic conditions (including the effects of the global pandemic).


How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill and indefinite-lived intangible assets impairment review process, including controls over management’s review of the significant assumptions described above. To test the estimated fair value of the Company’s reporting units and indefinite-lived intangible assets, we performed audit procedures that included, among others, assessing the valuation methodologies and testing the significant assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analyses. We compared the significant assumptions used by management to current industry and economic trends and evaluated whether changes to the Company’s business environment would affect the significant assumptions. For example, we compared the royalty rates used in estimating the fair value of certain indefinite-lived brand name intangible assets to current industry licensing agreements. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting units and indefinite-lived brand name intangible assets that would result from changes in the assumptions. We also involved our internal valuation specialists to assist in our evaluation of the significant assumptions and methodologies used by the Company in developing the fair value estimates. In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company.


						Adoption of Accounting Standards Update No. 2016-02, Leases
Description of the Matter						As discussed above and in Notes 2 and 4 to the consolidated financial statements, the Company adopted Accounting Standards Update No. 2016-02, Leases (“ASC 842”) on March 31, 2019. As a result of the adoption, the Company recorded a lease liability and related right of use asset of $2.2 billion and $1.6 billion, respectively on its balance sheet at March 28, 2020. Auditing management’s initial recognition of the lease liabilities and right-of-use asset upon adoption of ASU No. 2016-02 was especially challenging due to the volume and diversity of leases in the Company’s global lease portfolio. Further, the Company’s estimated incremental borrowing rate had a significant effect on the measurement of the lease liability and right-of use asset recognized upon adoption. Auditing management’s calculated incremental borrowing rate was complex due to the judgement involved in developing the expected interest rates for secured borrowings based on the term and the economic environment of the leases.

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How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the adoption of ASU No. 2016-02 included testing of controls over management’s review of the completeness of the lease population and the calculation of the incremental borrowing rate. We tested the completeness and accuracy of the data used in the Company’s initial recognition of the lease liabilities and right-of-use asset. Our audit procedures included, among others, comparing the information in a sample of lease agreements to the Company’s analyses and selecting leases from independent sources and assessing their inclusion in the Company’s analysis. We involved our valuation specialists to assist in evaluating the key assumptions and methodologies management used to develop the incremental borrowing rate. We independently calculated a range of incremental borrowing rates and compared it to the rates used by the Company.


						Impairment of Retail Store Long-Lived assets
Description of the Matter						As discussed in Note 2 to the consolidated financial statements, the Company evaluates its long-lived assets, which primarily include property, plant, and equipment and operating lease right-of-use assets at retail stores, for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. During the year ended March 28, 2020, the Company recognized an impairment charge of $357 million related to the long-lived assets at certain of its retail stores. In addition, upon adoption of ASC 842, Leases, the Company recorded a $152 million impairment, net of tax, of operating lease assets at certain of its retail stores as a reduction to retained earnings on March 31, 2019. Auditing the Company’s impairment assessment of retail store long-lived assets was complex and highly judgmental due to the significant estimation required in determining the future cash flows used to assess recoverability of each retail store long-lived asset group (undiscounted) and determining the fair value (discounted). The significant assumptions used include estimated future cash flows directly related to the future operation of the stores (including sales and expense growth rates) and the discount rate used to determine fair value. Significant assumptions used in determining the fair value of certain operating lease right-of-use assets include the current market rent and discount rate for the remaining lease term of the related stores. These assumptions are subjective in nature and are affected by expectations about future market or economic conditions (including the effects of the global pandemic).


How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the retail store long-lived assets impairment process, including, determining the undiscounted future cash flows of the stores and the fair value of the long-lived assets (including those related to operating leases) for the stores that were deemed to be impaired. We also tested controls over management’s review of the significant assumptions described above. Our testing of the Company’s impairment measurement included, among other procedures, evaluating the significant assumptions and operating data used to calculate the estimated future cash flows and to determine the fair value of the store long lived asset groups. For a sample of retail stores, we tested the completeness and accuracy of the data used by the Company in its analyses and we compared the significant assumptions used to determine the forecasted cash flows to historical results of the retail stores, current industry and economic trends and inquired of the Company’s executives to understand the business initiatives supporting the assumptions in the future cash flows. We involved our internal valuation specialists to assist in evaluating the fair value of certain operating lease right-of-use assets, which included assessing the estimated market rental rates of these leases by comparing them to rental rates for comparable leases and evaluating the applied discount rate.

/s/ ERNST & YOUNG LLP

We have served as the Company’s auditor since 2014

New York, New York

~~June 1, 2016~~July 8, 2020

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors ~~and Shareholders~~ of ~~Michael Kors~~Capri Holdings Limited

Opinion on Internal Control over Financial Reporting

We have audited ~~Michael Kors~~Capri Holdings Limited and subsidiaries’ ~~(“the Company”)~~ internal control over financial reporting as of ~~April 2, 2016,~~March 28, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). ~~Michael Kors~~In our opinion, Capri Holdings Limited and ~~subsidiaries’~~subsidiaries (“the Company”) maintained, in all material respects, effective internal control over financial reporting as of March 28, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 28, 2020 and March 30, 2019, the related consolidated statements of operations and comprehensive (loss) income, shareholders’ equity and cash flows for each of the three years in the period ended March 28, 2020, and the related notes and our report dated July 8, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Michael Kors Holdings Limited and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of April 2, 2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of April 2, 2016 and March 28, 2015, and the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended April 2, 2016 of Michael Kors Holdings Limited and subsidiaries and our report dated June 1, 2016 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

New York, New York

~~June 1, 2016~~July 8, 2020

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~~MICHAEL KORS~~CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)


	April 2, 2016			March 28, 2015				March 28, 2020		March 30, 2019
Assets							Assets
Current assets							Current assets
Cash and cash equivalents	$	702.0		$	978.9		Cash and cash equivalents	$	592	$	172
Receivables, net	307.9			363.4			Receivables, net	308		383
Inventories	546.8			519.9
Inventories, net							Inventories, net	827		953
Prepaid expenses and other current assets	113.1			127.5			Prepaid expenses and other current assets	167		221
Total current assets	1,669.8			1,989.7			Total current assets	1,894		1,729
Property and equipment, net	758.2			562.9			Property and equipment, net	561		615
Operating lease right-of-use assets							Operating lease right-of-use assets	1,625		—
Intangible assets, net	67.4			61.5			Intangible assets, net	1,986		2,293
Goodwill	23.2			14.0			Goodwill	1,488		1,659
Deferred tax assets	24.5			23.0			Deferred tax assets	225		112
Other assets	23.7			33.5			Other assets	167		242
Total assets	$	2,566.8		$	2,684.6		Total assets	$	7,946	$	6,650
Liabilities and Shareholders’ Equity
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity							Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity
Current liabilities							Current liabilities
Accounts payable	$	131.4		$	114.1		Accounts payable	$	428	$	371
Accrued payroll and payroll related expenses	59.7			62.9			Accrued payroll and payroll related expenses	93		133
Accrued income taxes	51.6			25.5			Accrued income taxes	42		34
Short-term operating lease liabilities							Short-term operating lease liabilities	430		—
Short-term debt							Short-term debt	167		630
Accrued expenses and other current liabilities	192.8			123.8			Accrued expenses and other current liabilities	241		374
Total current liabilities	435.5			326.3			Total current liabilities	1,401		1,542
Long-term operating lease liabilities							Long-term operating lease liabilities	1,758		—
Deferred rent	106.4			88.3			Deferred rent	—		132
Deferred tax liabilities	3.5			7.0			Deferred tax liabilities	465		438
Long-term debt	2.3			—			Long-term debt	2,012		1,936
Other long-term liabilities	19.6			22.0			Other long-term liabilities	142		166
Total liabilities	567.3			443.6			Total liabilities	5,778		4,214
Commitments and contingencies							Commitments and contingencies
Redeemable noncontrolling interest							Redeemable noncontrolling interest	—		4
Shareholders’ equity							Shareholders’ equity
Ordinary shares, no par value; 650,000,000 shares authorized; 208,084,175 shares issued and 176,441,891 outstanding at April 2, 2016; 206,486,699 shares issued and 199,656,833 outstanding at March 28, 2015	—			—
Treasury shares, at cost (31,642,284 shares at April 2, 2016 and 6,829,866 shares at March 28, 2015)	(1,650.1		)	(497.7		)
Ordinary shares, 0 par value; 650,000,000 shares authorized; 217,320,010 shares issued and 149,425,612 outstanding at March 28, 2020; 216,050,939 shares issued and 150,932,306 outstanding at March 30, 2019							Ordinary shares, 0 par value; 650,000,000 shares authorized; 217,320,010 shares issued and 149,425,612 outstanding at March 28, 2020; 216,050,939 shares issued and 150,932,306 outstanding at March 30, 2019	—		—
Treasury shares, at cost (67,894,398 shares at March 28, 2020 and 65,118,633 shares at March 30, 2019)							Treasury shares, at cost (67,894,398 shares at March 28, 2020 and 65,118,633 shares at March 30, 2019)	(3,325)		(3,223)
Additional paid-in capital	718.9			636.7			Additional paid-in capital	1,085		1,011
Accumulated other comprehensive loss	(80.9		)	(66.8		)
Accumulated other comprehensive income (loss)							Accumulated other comprehensive income (loss)	75		(66)
Retained earnings	3,007.8			2,168.8			Retained earnings	4,332		4,707
Total shareholders' equity of MKHL	1,995.7			2,241.0
Total shareholders’ equity of Capri							Total shareholders’ equity of Capri	2,167		2,429
Noncontrolling interest	3.8			—			Noncontrolling interest	1		3
Total equity	1,999.5			2,241.0
Total shareholders’ equity							Total shareholders’ equity	2,168		2,432
Total liabilities and shareholders’ equity	$	2,566.8		$	2,684.6		Total liabilities and shareholders’ equity	$	7,946	$	6,650

See accompanying notes to consolidated financial statements.

~~MICHAEL KORS~~

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(In millions, except share and per share data)


	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
Total revenue	$	5,551	$	5,238	$	4,719
Cost of goods sold	2,280		2,058		1,860
Gross profit	3,271		3,180		2,859
Selling, general and administrative expenses	2,464		2,075		1,767
Depreciation and amortization	249		225		208
Impairment of assets	708		21		33
Restructuring and other charges ⁽¹⁾	42		124		102
Total operating expenses	3,463		2,445		2,110
(Loss) Income from operations	(192)		735		749
Other income, net	(6)		(4)		(2)
Interest expense, net	18		38		22
Foreign currency loss (gain)	11		80		(13)
(Loss) income before provision for income taxes	(215)		621		742
Provision for income taxes	10		79		150
Net (loss) income	(225)		542		592
Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest	(2)		(1)		—
Net (loss) income attributable to Capri	$	(223)	$	543	$	592

Weighted average ordinary shares outstanding:
Basic	150,714,598		149,765,468		152,283,586
Diluted	150,714,598		151,614,350		155,102,885
Net (loss) income per ordinary share attributable to Capri:
Basic	$	(1.48)	$	3.62	$	3.89
Diluted	$	(1.48)	$	3.58	$	3.82

Statements of Comprehensive (Loss) Income:
Net (loss) income	$	(225)	$	542	$	592
Foreign currency translation adjustments	145		(134)		148
Net (loss) gain on derivatives	(4)		17		(16)
Comprehensive (loss) income	(84)		425		724
Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest	(2)		(1)		—

Comprehensive (loss) income attributable to Capri	$	(82)	$	426	$	724

Fiscal Years Ended
April 2,
2016 March 28,
2015 March 29,
2014
Net sales $ 4,538.8

$ 4,199.7
$ 3,170.5
Licensing revenue 173.3

171.8
140.3
Total revenue 4,712.1

4,371.5
3,310.8
Cost of goods sold 1,914.9

1,723.8
1,294.7
Gross profit 2,797.2

2,647.7
2,016.1
Selling, general and administrative expenses 1,428.0

1,251.5
926.9
Depreciation and amortization 183.2

138.4
79.7
Impairment of long-lived assets 10.9

0.8
1.3
Total operating expenses 1,622.1

1,390.7
1,007.9
Income from operations 1,175.1

1,257.0
1,008.2
Other income, net (3.7 )
(1.6 ) —
Interest expense, net 1.7

0.2
0.4
Foreign currency loss 4.8

2.6
0.1
Income before provision for income taxes 1,172.3

1,255.8
1,007.7
Provision for income taxes 334.6

374.8
346.2
Net income 837.7

881.0
661.5
Less: Net loss attributable to noncontrolling interest (1.4 ) —
—
Net income attributable to MKHL $ 839.1
$ 881.0
$ 661.5

Weighted average ordinary shares outstanding:
Basic 186,293,295
202,680,572
202,582,945
Diluted 189,054,289
205,865,769
205,638,107
Net income per ordinary share attributable to MKHL:
Basic $ 4.50
$ 4.35
$ 3.27
Diluted $ 4.44
$ 4.28
$ 3.22

Statements of Comprehensive Income:
Net income $ 837.7
$ 881.0
$ 661.5
Foreign currency translation adjustments 18.5
(91.3 ) —
Net (losses) gains on derivatives (32.5 ) 30.9
(2.9 )
Comprehensive income 823.7
820.6
658.6
Less: Net loss attributable to noncontrolling interest (1.4 ) —
—
Less: Other comprehensive income attributable to noncontrolling interest 0.1
—
—
Comprehensive income attributable to MKHL $ 825.0
$ 820.6
$ 658.6

⁽¹⁾Restructuring and other charges includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan (as defined in Note 11) and other restructuring initiatives, and costs recorded in connection with the acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited (see Note 5 and Note 11).

See accompanying notes to consolidated financial statements.

~~MICHAEL KORS~~

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in millions, except share data which is in thousands)


																																			Ordinary Shares									Additional Paid-in Capital		Treasury Shares							Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total Equity of Capri		Non-controlling Interests	Total Equity
	Ordinary Shares				Additional Paid-in Capital				Treasury Shares						Accumulated Other Comprehensive Loss			Retained Earnings				Total Equity of MKHL				Non-controlling Interest				Total Equity					Shares			Amounts							Shares			Amounts
	Shares		Amounts					Shares			Amounts
Balance at March 30, 2013	201,454		$	—		$	424.4			—			$	—							$				(3.5				)					$	626.3	$	1,047.2		$	—	$	1,047.2
Balance at April 1, 2017																																	Balance at April 1, 2017		209,332			$	—			$	768	(53,499)		$	(2,655)		$	(81)	$	3,560	$	1,592	$	3	$	1,595
Net income	—		—		—							—			—			661.5				661.5				—				661.5			Net income		—			—				—		—		—			—		592		592		—		592
Other comprehensive loss	—		—		—				—			—			(2.9		)	—				(2.9		)		—				(2.9		)
Other comprehensive income																																	Other comprehensive income		—			—				—		—		—			132		—		132		—		132
Total comprehensive income	—		—		—				—			—			—			—				658.6				—				658.6			Total comprehensive income		—			—				—		—		—			—		—		724		—		724
Issuance of restricted shares	251		—		—				—			—			—			—				—				—				—
Non-controlling interest of Jimmy Choo joint ventures																																	Non-controlling interest of Jimmy Choo joint ventures		—			—				—		—		—			—		—		—		3		3
Partial repurchase of non-controlling interest																																	Partial repurchase of non-controlling interest		—			—				—		—		—			—		—		—		(1)		(1)
Vesting of restricted awards, net of forfeitures																																	Vesting of restricted awards, net of forfeitures		542			—				—		—		—			—		—		—		—		—
Exercise of employee share options	2,586		—		19.0				—			—			—			—				19.0				—				19.0			Exercise of employee share options		1,117			—				14		—		—			—		—		14		—		14
Equity compensation expense	—		—		29.1				—			—			—			—				29.1				—				29.1			Equity compensation expense		—			—				50		—		—			—		—		50		—		50
Tax benefits on exercise of share options	—		—		54.7				—			—			—			—				54.7				—				54.7
Purchase of treasury shares	—		—		—				(30	)		(2.4		)	—			—				(2.4		)		—				(2.4		)	Purchase of treasury shares		—			—				—		(7,794)		(361)			—		—		(361)		—		(361)
Balance at March 29, 2014	204,291		$	—	$	527.2			(30	)		$	(2.4	)	$	(6.4	)	$	1,287.8			$	1,806.2			$	—			$	1,806.2
Net income	—		—		—				—			—			—			881.0				881.0				—				881.0
Redemption of capital/dividends																																	Redemption of capital/dividends		—			—				—		—		—			—		—		—		(1)		(1)
Other																																	Other		—			—				(1)		—		—			—		—		(1)		—		(1)
Balance at March 31, 2018, as previously reported																																	Balance at March 31, 2018, as previously reported		210,991			$	—			$	831	(61,293)		$	(3,016)		$	51	$	4,152	$	2,018	$	4	$	2,022
Adoption of accounting standard (ASC 606)																																	Adoption of accounting standard (ASC 606)		—			—				—		—		—			—		12		12		—		12
Balance as of April 1, 2018																																	Balance as of April 1, 2018		210,991			—				831		(61,293)		(3,016)			51		4,164		2,030		4		2,034
Net income (loss)																																	Net income (loss)		—			—				—		—		—			—		543		543		(1)		542
Other comprehensive loss	—		—		—				—			—			(60.4		)	—				(60.4		)		—				(60.4		)	Other comprehensive loss		—			—				—		—		—			(117)		—		(117)		—		(117)
Total comprehensive income	—		—		—				—			—			—			—				820.6				—				820.6
Issuance of restricted shares	413		—		—				—			—			—			—				—				—				—
Total comprehensive income (loss)																																	Total comprehensive income (loss)		—			—				—		—		—			—		—		426		(1)		425
Issuance of ordinary shares																																	Issuance of ordinary shares		2,395			—				91		—		—			—		—		91		—		91
Vesting of restricted awards, net of forfeitures																																	Vesting of restricted awards, net of forfeitures		818			—				—		—		—			—		—		—		—		—
Exercise of employee share options	1,783		—		15.3				—			—			—			—				15.3				—				15.3			Exercise of employee share options		1,847			—				29		—		—			—		—		29		—		29
Equity compensation expense	—		—		48.9				—			—			—			—				48.9				—				48.9			Equity compensation expense		—			—				60		—		—			—		—		60		—		60
Tax benefits on exercise of share options	—		—		45.3				—			—			—			—				45.3				—				45.3
Purchase of treasury shares	—		—		—				(6,800	)		(495.3		)	—			—				(495.3		)		—				(495.3		)	Purchase of treasury shares		—			—				—		(3,826)		(207)			—		—		(207)		—		(207)
Balance at March 28, 2015	206,487		$	—	$	636.7			(6,830	)		$	(497.7	)	$	(66.8	)	$	2,168.8			$	2,241.0			$	—			$	2,241.0
Net income	—		—		—				—			—			—			839.1				839.1				(1.4		)		837.7
Other comprehensive loss	—		—		—				—			—			(14.1		)	—				(14.1		)		0.1				(14.0		)
Total comprehensive income (loss)	—		—		—				—			—			—			—				825.0				(1.3		)		823.7
Fair value of noncontrolling interest in MK Panama	—		—		—				—			—			—			—				—				5.1				5.1
Forfeitures of restricted awards, net	(35	)	—		—				—			—			—			—				—				—				—

Balance at March 30, 2019, as previously reported																																	Balance at March 30, 2019, as previously reported		216,051			$	—			$	1,011	(65,119)		$	(3,223)		$	(66)	$	4,707	$	2,429	$	3	$	2,432
Adoption of accounting standard (See Note 2)																																	Adoption of accounting standard (See Note 2)		—			—				—		—		—			—		(152)		(152)		—		(152)
Balance as of March 31, 2019																																	Balance as of March 31, 2019		216,051			—				1,011		(65,119)		(3,223)			(66)		4,555		2,277		3		2,280
Net (loss)																																	Net (loss)		—			—				—		—		—			—		(223)		(223)		(2)		(225)
Other comprehensive income																																	Other comprehensive income		—			—				—		—		—			141		—		141		—		141
Total comprehensive (loss)																																	Total comprehensive (loss)		—			—				—		—		—			—		—		(82)		(2)		(84)
Vesting of restricted awards, net of forfeitures																																	Vesting of restricted awards, net of forfeitures		1,262			—				—		—		—			—		—		—		—		—
Exercise of employee share options	1,632		—		12.7				—			—			—			—				12.7				—				12.7			Exercise of employee share options		7			—				—		—		—			—		—		—		—		—
Equity compensation expense	—		—		48.4				—			—			—			—				48.4				—				48.4			Equity compensation expense		—			—				70		—		—			—		—		70		—		70
Tax benefits on exercise of share options	—		—		21.1				—			—			—			—				21.1				—				21.1
Purchase of treasury shares	—		—		—				(24,812	)		(1,152.4		)	—			—				(1,152.4		)		—				(1,152.4		)	Purchase of treasury shares		—			—				—		(2,775)		(102)			—		—		(102)		—		(102)
Other	—		—		—				—			—			—			(0.1		)		(0.1		)		—				(0.1		)
Balance at April 2, 2016	208,084		$	—	$	718.9			(31,642	)		$	(1,650.1	)	$	(80.9	)	$	3,007.8			$	1,995.7			$	3.8			$	1,999.5

Adjustment of redeemable non-controlling interests to redemption value																																	Adjustment of redeemable non-controlling interests to redemption value		—			—				4		—		—			—		—		4		—		4
Balance at March 28, 2020																																	Balance at March 28, 2020		217,320			$	—			$	1,085	(67,894)		$	(3,325)		$	75	$	4,332	$	2,167	$	1	$	2,168

See accompanying notes to consolidated financial statements.

~~MICHAEL KORS~~

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Fiscal Years Ended
April 2,
2016 March 28,
2015 March 29,
2014
Cash flows from operating activities
Net income $ 837.7
$ 881.0
$ 661.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 183.2
138.4
79.7
Equity compensation expense 48.4
48.9
29.1
Deferred income taxes (1.9 ) 6.2
(29.9 )
Non-cash litigation related costs 1.9
5.7
2.0
Amortization of deferred rent 2.6
5.1
6.3
Loss on disposal of fixed assets 2.8
1.9
3.8
Impairment and write-off of property and equipment 10.9
0.8
1.3
Amortization of deferred financing costs 0.9
0.7
0.7
Tax benefits on exercise of share options (21.1 ) (45.3 ) (54.7 )
Foreign currency (gains) losses 4.8
(1.5 ) 0.1
Gain on acquisition of MK Korea (3.7 ) —

—
Loss (income) earned on joint venture 1.0
(0.1 ) (0.4 )
Change in assets and liabilities:
Receivables, net 52.5
(83.3 ) (104.4 )
Inventories (16.3 ) (112.4 ) (158.2 )
Prepaid expenses and other current assets (5.3 ) (20.1 ) (5.2 )
Other assets (0.4 ) (6.3 ) (4.3 )
Accounts payable 14.2
(8.6 ) 53.7
Accrued expenses and other current liabilities 104.5
36.3
126.5
Other long-term liabilities 11.7
10.5
25.4
Net cash provided by operating activities 1,228.4
857.9
633.0
Cash flows from investing activities
Capital expenditures (369.2 ) (356.2 ) (184.7 )
Purchase of intangible assets (11.4 ) (29.2 ) (28.8 )
Investment in joint venture (1.0 ) (3.0 ) —
Equity method investments —
—
(2.0 )
Cash received, net of cash paid for acquired businesses 0.5
—
—
Net cash used in investing activities (381.1 ) (388.4 ) (215.5 )
Cash flows from financing activities
Repurchase of treasury shares (1,152.4 ) (495.3 ) (2.4 )
Tax benefits on exercise of share options 21.1
45.3
54.7
Exercise of employee share options 12.7
15.3
19.0
Repayments of borrowings under revolving credit agreement (199.8 ) —
(21.1 )
Borrowings under revolving credit agreement 192.6
—
21.1
Payment of deferred financing costs (2.4 ) —
(0.2 )
Other financing activities (0.1 ) —
—
Net cash (used in) provided by financing activities (1,128.3 ) (434.7 ) 71.1
Effect of exchange rate changes on cash and cash equivalents 4.1
(27.1 ) (4.7 )
Net (decrease) increase in cash and cash equivalents (276.9 ) 7.7
483.9
Beginning of period 978.9
971.2
487.3
End of period $ 702.0
$ 978.9
$ 971.2
Supplemental disclosures of cash flow information
Cash paid for interest $ 1.5
$ 0.7
$ 0.7
Cash paid for income taxes $ 273.0
$ 373.3
$ 280.7
Supplemental disclosure of noncash investing and financing activities
Accrued capital expenditures $ 33.6
$ 32.9
$ 16.3


	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
Cash flows from operating activities
Net (loss) income	$	(225)	$	542	$	592
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	249		225		208
Equity compensation expense	70		60		50
Impairment of assets	708		21		33
Bad debt expense	29		4		8
Losses on store lease exits	—		18		29
Deferred income taxes	(73)		(71)		9
Changes to lease related balances, net	(55)		—		—
Amortization of deferred financing costs	8		4		4
Tax deficit (benefit) on exercise of share options	2		(24)		(7)

Foreign currency losses (gains)	11		80		(13)
Other non-cash charges	3		—		—
Change in assets and liabilities:
Receivables, net	42		(23)		11
Inventories, net	115		(125)		46
Prepaid expenses and other current assets	20		(31)		49
Accounts payable	63		(48)		(21)
Accrued expenses and other current liabilities	(95)		20		56
Other long-term assets and liabilities	(13)		42		8
Net cash provided by operating activities	859		694		1,062
Cash flows from investing activities
Capital expenditures	(223)		(181)		(120)
Purchase of intangible assets	—		(3)		(3)

Cash paid for business acquisitions, net of cash acquired	(13)		(1,875)		(1,415)
Realized (loss) gain on hedge related to acquisitions	—		(77)		5
Settlement of a net investment hedge	298		11		—
Net cash provided by (used in) investing activities	62		(2,125)		(1,533)
Cash flows from financing activities
Debt borrowings	2,282		4,204		2,520
Debt repayments	(2,676)		(2,560)		(1,784)
Debt issuance costs	(1)		(15)		—
Purchase of treasury shares	(102)		(207)		(361)
Exercise of employee share options	—		29		14


Net cash (used in) provided by financing activities	(497)		1,451		389
Effect of exchange rate changes on cash and cash equivalents	(4)		(11)		15
Net increase (decrease) in cash and cash equivalents	420		9		(67)
Beginning of period	172		163		230
End of period	$	592	$	172	$	163
Supplemental disclosures of cash flow information
Cash paid for interest	$	80	$	45	$	11
Cash paid for income taxes	$	98	$	172	$	104
Supplemental disclosure of non-cash investing and financing activities
Accrued capital expenditures	$	30	$	25	$	26

See accompanying notes to consolidated financial statements.

~~MICHAEL KORS~~

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Basis of Presentation

~~Michael Kors Holdings Limited (“MKHL,” and together with its subsidiaries, the “Company”)~~The Company was incorporated in the British Virgin Islands (“BVI”) on December 13, ~~2002.~~2002 as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited (“Capri,” and together with its subsidiaries, the “Company”) on December 31, 2018. The Company is a holding company that owns brands that are leading ~~designer, marketer, distributor~~designers, marketers, distributors and ~~retailer~~retailers of branded women’s and men’s accessories, apparel and ~~accessories and men’s apparel~~footwear bearing the Versace, Jimmy Choo and Michael Kors ~~tradename~~tradenames and ~~related trademarks “MICHAEL KORS,” “MICHAEL MICHAEL KORS,” and various other~~ related trademarks and logos. The ~~Company’s business consists of retail, wholesale~~Company operates in 3 reportable segments: Versace, Jimmy Choo and licensing segments. Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.Michael Kors. See Note 20 for additional information.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned or controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company’s audited consolidated financial statements include the following operations for the periods from the respective acquisition/consolidation date through March 28, 2020:

~~The Company has historically accounted for its investment in its Latin American joint venture, MK (Panama) Holdings, S.A. and subsidiaries~~•Gianni Versace S.r.l. (“~~MK Panama”~~Versace”), ~~under the equity method of accounting. During the second quarter of Fiscal 2016, the Company made a series of capital contributions~~acquired on December 31, 2018;

•Jimmy Choo Group Limited (“Jimmy Choo”), acquired on November 1, 2017;

See Note 5 for additional information related to the joint venture, obtaining a controlling interest in MK Panama. As such, the Company has been consolidating MK Panama into its operations beginning with the second quarter of Fiscal 2016. In addition, on January 1, 2016, the Company acquired its previously licensed business in South Korea ("MK Korea") upon expiration of the related license agreement. As a result, the Company began consolidating MK Korea into its operations during the fourth quarter of Fiscal 2016. ~~See~~ ~~Note 3~~ ~~for additional information.~~above acquisitions.

The Company utilizes a 52 to 53 week fiscal year ending on the Saturday closest to March 31. As such, the fiscal ~~year ending on April 2, 2016 contains 53 weeks (“Fiscal 2016”), whereas each of the fiscal~~ years ending on March 28, ~~2015~~2020, March 30, 2019, and March ~~29, 2014~~31, 2018 (“Fiscal ~~2015”~~2020”, “Fiscal 2019” and “Fiscal ~~2014”~~2018”, respectively) ~~consisted of~~contain 52 weeks.

Timing of Filing of Annual Report on Form 10-K

As a result of the impacts of the COVID-19 pandemic on the business and employees of the Company, the Company has relied on the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions From the Reporting and Proxy Delivery Requirements for Public Companies dated March 25, 2020, to delay the filing of its Annual Report on Form 10-K for Fiscal 2020 by up to 45 days from May 27, 2020, which is the original filing due date.

The Company’s operations and business have experienced significant disruption due to the unprecedented conditions surrounding the COVID-19 global pandemic. The Company has been following the recommendations of local government and health authorities to minimize exposure risk for its employees. As a result, most of the Company’s corporate offices globally have been temporarily closed due to the pandemic and corporate employees involved in the Company’s annual financial statement closing process and finalizing the audit of the Company’s financial statements for Fiscal 2020 are working remotely. In addition, the Company required additional time to prepare analyses related to the impact of COVID-19 on its business and complete related required disclosures. This has resulted in delays in finalizing the Annual Report on Form 10-K for Fiscal 2020 and accompanying audited financial statements.

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2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of inventory ~~recovery,~~net realizable value, the valuation of share-based compensation, the valuation of deferred taxes and the ~~estimated useful lives used for amortization and depreciation~~valuation of goodwill, intangible assets and property and ~~equipment.~~equipment, along with the estimated useful lives assigned to these assets. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation.

Seasonality

The Company experiences certain effects of seasonality with respect to its business. The Company generally experiences greater sales during its third fiscal quarter, primarily driven by holiday season sales, and the lowest sales during its first fiscal quarter.

Revenue Recognition

The Company accounts for contracts with its customers when there is approval and commitment from both parties, the rights of the parties and payment terms have been identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when ~~there~~control of the promised goods or services is ~~persuasive evidence of~~transferred to the Company's customers in an ~~arrangement, delivery has occurred,~~amount that reflects the ~~price has been fixed and determinable and collectability is reasonably assured.~~consideration the Company expects to be entitled to in exchange for goods or services. The Company recognizes retail store revenues ~~upon~~when control of the product is transferred at the point of sale ~~of its products to retail consumers,~~at Company owned stores, including concessions, net of estimated returns. Revenue from sales through the Company’s e-commerce ~~site~~sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, after merchandise is shipped and control of the ~~title and risk of loss are~~underlying product is transferred to the

Company’s wholesale customers. To arrive at net sales for retail revenue, gross sales are reduced by actual customer returns as well as by a provision for estimated future customer returns, which is based on management’s review of historical and ~~current~~future customer ~~returns.~~return expectations. Sales taxes collected from retail customers are presented on a net basis and, as such, are excluded from revenue. To arrive at net sales for wholesale revenue, gross sales are reduced by provisions for estimated future returns, based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. These estimates are based on such factors as historical trends, actual and forecasted performance and current market conditions, which are reviewed by management on a quarterly basis.

The following table details the activity and balances of the Company’s sales reserves for the fiscal years ended ~~April 2, 2016,~~ March 28, ~~2015,~~2020, March 30, 2019, and March ~~29, 2014~~31, 2018 (in millions):

Balance
Beginning
of Year

Amounts
Charged to
Revenue

Write-offs
Against
Reserves

Balance
at
Year End
Retail
Return Reserves:
Fiscal year ended April 2, 2016 $ 2.5
$ 71.7
$ (69.5 ) $ 4.7
Fiscal year ended March 28, 2015 2.3
57.0
(56.8 ) 2.5
Fiscal year ended March 29, 2014 3.2
45.6
(46.5 ) 2.3


	Balance Beginning of Year		Amounts Charged to Revenue		Write-offs Against Reserves		Balance at Year End
Retail
Return Reserves:
Fiscal Year Ended March 28, 2020	$	15	$	231	$	(234)	$	12
Fiscal Year Ended March 30, 2019	12		226		(223)		15
Fiscal Year Ended March 31, 2018	7		161		(156)		12

Balance
Beginning
of Year

Amounts
Charged to
Revenue

Write-offs
Against
Reserves

Balance
at
Year End
Wholesale
Total Sales Reserves:
Fiscal year ended April 2, 2016 $ 87.5
$ 348.4
$ (325.0 ) $ 110.9
Fiscal year ended March 28, 2015 65.9
281.0
(259.4 ) 87.5
Fiscal year ended March 29, 2014 43.0
203.5
(180.6 ) 65.9

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	Balance Beginning of Year		Amounts Charged to Revenue		Write-offs Against Reserves		Balance at Year End
Wholesale
Total Sales Reserves:
Fiscal Year Ended March 28, 2020	$	112	$	266	$	(224)	$	154
Fiscal Year Ended March 30, 2019	109		262		(259)		112
Fiscal Year Ended March 31, 2018	97		258		(246)		109

Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported sales of licensed products bearing the Company’s ~~tradenames~~trademarks at rates specified in the license agreements. These agreements are also subject to contractual minimum levels. Royalty revenue generated by ~~geography-specific~~geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as outlined in the agreements. These agreements allow for the use of the Company’s tradenames to sell its branded products in specific geographic regions.

The adverse impact from the COVID-19 pandemic which includes, but is not limited to, temporary retail store closures, wholesale customer store closures, a reduction in retail store traffic, a decline in international tourism and a decrease in consumer consumption is reflected in the Company's Fiscal 2020 total revenue.

Loyalty Program

The Company has a Michael Kors customer loyalty program in the United States, which allows customers to earn points on qualifying purchases toward monetary and non-monetary rewards that may be redeemed for purchases at the Company’s retail stores and e-commerce site. The Company allocates a portion of the initial sales transaction based on the estimated relative fair value of the benefits using statistical formulas based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of an estimated “breakage,” is recorded as a reduction to revenue in the consolidated statements of income and comprehensive income and within accrued expenses and other current liabilities in the Company’s consolidated balance sheets. See Note 3 for additional information.

Advertising and Marketing Costs

Advertising and marketing costs are expensed ~~when incurred~~over the period of benefit and are ~~reflected~~recorded in selling, general and administrative expenses. Advertising and marketing expense was ~~$103.9~~$201 million, ~~$103.6~~$158 million and ~~$65.7~~$167 million in Fiscal ~~2016,~~2020, Fiscal ~~2015~~2019 and Fiscal ~~2014,~~2018, respectively.

Cooperative advertising expense, which represents the Company’s participation in advertising expenses of its wholesale customers, is reflected as a reduction of net sales. Expenses related to cooperative advertising for Fiscal ~~2016,~~2020, Fiscal ~~2015~~2019 and Fiscal ~~2014,~~2018, were ~~$7.4~~$7 million, ~~$8.0~~$8 million and ~~$7.3~~$6 million, respectively.

Shipping and Handling

~~Shipping~~Freight-in expenses are recorded as part of cost of goods sold, along with product costs and ~~handling~~other costs ~~were $98.6 million, $92.6 million and $78.6 million~~to acquire inventory. The costs of preparing products for ~~Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively, and~~sale, including warehousing expenses, are included in selling, general and administrative expenses. Selling, general and administrative expenses also include the costs of shipping products to the Company’s e-commerce customers. Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of ~~operations.~~operations and comprehensive income were $157 million, $132 million and $129 million for Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively. Shipping and handling costs charged to customers are included in total revenue.

Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Included in the Company’s cash and cash equivalents as of ~~April 2, 2016~~March 28, 2020 and March ~~28, 2015~~30, 2019 are credit card receivables of ~~$14.5~~$4 million and ~~$15.8~~$24 million, respectively, which generally settle within two to three business days. The decrease in credit card receivables year over year is mainly due to the impact on sales from the COVID-19 pandemic.

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Inventories

Inventories mainly consist of finished goods with the exception of raw materials and work in process inventory. The combined total of raw materials and work in process inventory recorded on the Company's consolidated balance sheets as of March 28, 2020 and March 30, 2019 were $27 million and $25 million, respectively. Inventories are stated at the lower of cost or ~~market~~net realizable value. Cost is determined using the weighted-average cost method. Costs include amounts paid to independent manufacturers, plus duties and freight to bring the goods to the Company’s warehouses, ~~which are located in the United States, Holland, Canada, Japan, Hong Kong and South Korea.~~as well as shipments to stores. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The net realizable value of the Company’s inventory is estimated based on historical experience, current and forecasted demand, and market conditions. In addition, reserves for inventory ~~loss~~losses are estimated based on historical experience and physical inventory counts. The Company’s inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations. Our historical estimates of these adjustments have not differed materially from actual results.

The net realizable value of the Company's inventory as of March 28, 2020 includes the adverse impacts connected to the COVID-19 pandemic. This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, a decline in international tourism and a decrease in consumer consumption.

Store Pre-opening Costs

Costs associated with the opening of new retail stores and start up activities, are expensed as incurred.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization (carrying value). Depreciation is recorded on a straight-line basis over the expected remaining useful lives of the related assets. Equipment, furniture and fixtures, are depreciated over five to seven years, computer hardware and software are depreciated over three to five ~~years~~years. The Company’s share of the cost of constructing in-store shop displays within its wholesale customers’ floor-space (“shop-in-shops”), which is paid directly to third-party suppliers, is capitalized as property and ~~in-store shops are~~equipment and is generally amortized over a useful life of three to ~~four~~five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated remaining useful lives of the related assets or the remaining lease term, including highly probable renewal periods. The Company includes all depreciation and amortization expense as a component of total operating expenses, as the underlying long-lived assets are not directly or indirectly related to bringing the Company’s products to their existing location and condition. Maintenance and repairs are charged to expense in the year incurred.

The Company’s share of the cost of constructing in-store shop displays within its wholesale customers’ floor-space (“shop-in-shops”), which is paid directly to third-party suppliers, is capitalized as property and equipment and is generally amortized over a useful life of three or four years.

The Company capitalizes, in property and equipment, direct costs incurred during the application development stage and the implementation stage for developing, purchasing or otherwise acquiring software for its internal use. These costs are amortized over the estimated useful lives of the software, generally five years. All costs incurred during the preliminary project stage, including project scoping and identification and testing of alternatives, are expensed as incurred.

~~Finite-Lived~~Definite-Lived Intangible Assets

The Company’s ~~finite-lived~~definite-lived intangible assets consist of trademarks ~~lease rights~~ and customer relationships ~~and~~which are stated at cost less accumulated amortization. ~~Trademarks are amortized over twenty years,~~The Company’s customer relationships are amortized over five ~~years~~ to ~~ten years, and lease~~eighteen years. Reacquired rights recorded in connection with the acquisition of MKHKL are amortized ~~over~~through March 31, 2041, the ~~terms~~original expiration date of the ~~related lease agreements, including highly probable renewal periods, on a straight-line basis.~~Michael Kors license agreement in the Greater China region. The trademark for the Michael Kors brand is amortized over twenty years.

Impairment of Long-lived Assets

The Company evaluates its long-lived assets, including ~~fixed~~operating lease right-of-use assets, property and ~~finite-lived~~equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The Company’s impairment testing is based on its best estimate of its future operating cash flows. IfTo the extent the sum of the estimated undiscounted future cash flows associated with the asset is less than the ~~asset’s~~ carrying value, the Company typically recognizes an impairment ~~charge is recognized, which is~~loss measured asby the amount byin which the carrying value exceeds the fair value of the ~~asset. These estimates of cash flow~~asset, taking into consideration other market assumptions. The fair values determined by management require significant ~~management~~ judgment and include certain assumptions ~~about~~regarding future ~~volume,~~ sales and expense growth rates, ~~devaluation~~discount rates and ~~inflation.~~estimates of current real estate market values. As such, these estimates may differ from actual ~~cash flows.~~results and are affected by future market and economic conditions.

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Goodwill and Other Indefinite-lived Intangible Assets

The Company records indefinite-lived intangible assets based on fair value on the date of acquisition. Goodwill is recorded for the difference between the fair value of the purchase consideration over the fair value of the net identifiable tangible and intangible assets acquired. The brand intangible assets recorded in connection with the acquisitions of Versace and Jimmy Choo were determined to be indefinite-lived intangible assets, which are not subject to amortization. The Company performs an impairment assessment of goodwill, as well as the Versace and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill, isthe Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

The Company may assess its goodwill and its brand indefinite-lived intangible assets for impairment initially using a qualitative approach ~~(“step zero”)~~ to determine whether it is more likely than not that the fair value of ~~goodwill~~these assets is greater than ~~its~~their carrying value. When performing a qualitative test, the Company assesses various factors including industry and market conditions, macroeconomic conditions and performance of the Company’s businesses. If the results of the qualitative assessment indicate that it is ~~not~~ more likely than not that the ~~fair value of~~Company’s goodwill ~~exceeds its carrying value,~~and other indefinite-lived intangible assets are impaired, a quantitative ~~goodwill~~impairment analysis would be performed to determine if impairment is required. The Company may also elect to perform a quantitative analysis of goodwill and its indefinite-lived intangible assets initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. The valuation methods used in the quantitative fair value assessment included a discounted cash flow ~~and market multiples method, require~~analysis which requires the Company’s management to make certain assumptions and estimates regarding ~~certain~~ industry trends and future profitability of the Company’s reporting units. If the fair value of a reporting unit exceeds the related carrying ~~amount~~value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, the Company would compare the implied fair value of the reporting unit goodwill to its carrying value. To compute the implied fair value, the Company would assign the fair value of the reporting unit to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. If the carrying value of the reporting unit goodwill exceeded the implied fair value of the reporting unit goodwill, the Company would record an impairment loss ~~to write down such goodwill to its implied fair value. The~~is recorded for the difference. This valuation ~~of goodwill~~ is affected by ~~among other things,~~certain estimates including the Company’s ~~business plan for the~~ future revenue growth rates, margins and ~~estimated results of future operations.~~discount rates. Future events could cause the Company to conclude that impairment indicators exist, and, therefore, that goodwill may be impaired.

~~There were no~~When performing a quantitative impairment assessment of the Company’s brand indefinite-lived intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the "relief from royalty" method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset. This approach is dependent on many factors, including estimates of future growth, royalty rates, and discount rates. Actual future results may differ from these estimates. Impairment loss is recognized when the estimated fair value of the indefinite-lived brand intangible assets is less than its carrying amount.

The Company recorded impairment charges of $171 million related to the goodwill ~~in any~~associated with the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $180 million related to the Jimmy Choo brand indefinite-lived intangible asset during Fiscal 2020. The impairment charges were recorded within impairment of assets on the Company's consolidated statement of operations and comprehensive income for the fiscal ~~periods presented.~~year ended March 28, 2020. See Note 119 and Note 14 for information relating to the ~~Company's~~Company’s annual impairment analysis performed during the fourth quarter of Fiscal ~~2016.~~2020.

Insurance

The Company uses a combination of insurance and self-insurance for losses related to a number of risks, including workers’ compensation and employee-related health care benefits. The Company also maintains stop-loss coverage with third-party insurers to limit its exposure arising from claims. Self-insurance claims filed and claims incurred but not reported are accrued based upon management’s estimates of the discounted cost for self-insured claims incurred using actuarial assumptions, historical loss experience, actual payroll and other data. Although the Company believes that it can reasonably estimate losses related to these claims, actual results could differ from these estimates.

The Company also maintains other types of customary business insurance policies, including business interruption insurance. Insurance recoveries represent gain contingencies and are recorded upon actual settlement with the insurance carrier.

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Share-based Compensation

The Company grants share-based awards to certain employees and directors of the Company. The grant date fair value of share options is calculated using the Black-Scholes option pricing model. The ~~closing market price at~~Company uses its own historical experience in determining the grant date is used to determine the grant date fair value of restricted shares, restricted shares units (RSUs) and performance RSUs. These fair values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.

~~The Company’s expected volatility is based on the average volatility rates of similar actively traded companies over the Company’s estimated expected holding periods. The~~ expected holding period for performance-based options is based on the period to expiration, which is generally 9-10 years, which directly correlates to the Company’s service period requirement for such options. The expected holding period forand volatility of its time-based options is calculated using the simplified method, which uses the vesting term of the options, generally 4 years, and the contractual term of 7 years, resulting in a holding period of 4.5-4.75 years. The simplified method was chosen as a means to determine the Company’s estimated holding period, as prior to December 2011, the Company was privately held and, as such, there is insufficient historicalshare option ~~exercise experience.~~awards. The risk-free interest rate is derived from the zero-coupon United States (“U.S.”) Treasury Strips yield curve based on the grant’s estimated holding period. Determining the grant date fair value of share-based awards requires considerable judgment, including estimating expected volatility, expected term and risk-free rate. If factors change and the Company employs different assumptions, the fair value of future awards and the resulting share-based compensation expense may differ significantly from what the Company has estimated in the past.

The closing market price of the Company’s shares on the date of grant is used to determine the grant date fair value of restricted shares, time-based restricted shares units (“RSU”s) and performance-based RSUs. These fair values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.

Foreign Currency Translation and Transactions

The financial statements of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. The Company’s functional currency is the United States Dollar (“USD”) for ~~MKHL~~Capri and its United States based subsidiaries. Assets and liabilities are translated using period-end exchange rates, while revenues and expenses are translated using average exchange rates over the reporting period. The resulting translation adjustments are recorded separately in shareholders’ equity as a component of accumulated other comprehensive ~~income~~ (loss). income. Foreign currency income and losses resulting from the re-measuring of transactions denominated in a currency other than the functional currency of a particular entity are included in foreign currency loss (gain) on the Company’s consolidated statements of ~~operations.~~operations and comprehensive income.

Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain transactions. The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.

In connection with the September 24, 2018 definitive agreement to acquire all of the outstanding shares of Versace, the Company entered into forward foreign currency exchange contracts with notional amounts totaling €1.680 billion (approximately $2.001 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition, which were settled on December 21, 2018. Likewise, in connection with the July 25, 2017 cash offer to acquire Jimmy Choo, the Company entered into a forward foreign currency exchange contract with a notional amount of £1.115 billion (approximately $1.469 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition, which was settled on October 30, 2017. These derivative contracts were not designated as accounting hedges. Therefore, changes in fair value are recorded to foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive income. The Company’s accounting policy is to classify cash flows from derivative instruments in the same category as the cash flows from the items being hedged. Accordingly, the Company classified $77 million of realized losses and $5 million of realized gains, respectively, relating to these derivative instruments within cash flows from investing activities during Fiscal 2019 and Fiscal 2018.

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The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including description of the hedged item and the hedging instrument and the risk being ~~hedged, and the manner in which hedge effectiveness will be assessed prospectively and retrospectively.~~hedged. The ~~effective portion of~~ changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive (loss) income ~~(loss)~~ until the hedged item ~~effects~~affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive (loss) income ~~(loss)~~ are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. ~~Effectiveness is assessed on a quarterly basis and any portion of the designated hedge contracts deemed ineffective is recorded to foreign currency gain (loss).~~ If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency ~~gain (loss)~~loss (gain) in the Company’s consolidated statements of ~~operations.~~operations and comprehensive income. The Company classifies cash flows relating to its ~~derivative instruments~~forward foreign currency exchange contracts related to purchase of inventory consistently with the classification of the hedged item, within cash flows from operating activities.

The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, the Company only enters into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge.

Net Investment Hedges

The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its U.S. Dollars and these foreign currencies. The Company has elected the spot method of designating these contracts under ASU 2017-12 and has designated these contracts as net investment hedges. The net gain or (loss) on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive (loss) income on the Company’s consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest expense in the Company’s statement of operations and comprehensive income. Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.

During the fourth quarter of Fiscal 2020, the Company terminated all of its net investment hedges related to its Euro-denominated subsidiaries. The early termination of these hedges resulted in the Company receiving $296 million in cash during the fourth quarter of Fiscal 2020.

Income Taxes

Deferred income tax assets and liabilities have been provided for temporary differences between the tax bases and financial reporting bases of the Company’s assets and liabilities using the tax rates and laws in effect for the periods in which the differences are expected to reverse. The Company periodically assesses the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or estimates and judgments used.

Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. The Company periodically reviews the recoverability of its deferred tax assets and provides valuation allowances, as deemed necessary, to reduce deferred tax assets to amounts that more-likely-than-not will be realized. The Company’s management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. Deferred tax assets could be reduced in the future if the Company’s estimates of taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.

The Company recognizes the impact of an uncertain income tax position taken on its income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. The tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments for those positions. The Company records interest expense and penalties payable to relevant tax authorities as income tax expense.

~~Rent Expense, Deferred Rent~~

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Leases

On March 31, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize a lease liability and ~~Landlord Construction Allowances~~a right-of-use asset on the balance sheet for all leases, except certain short-term leases. The Company adopted the new standard recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods.

The Company leases retail stores, office space ~~retail stores~~ and ~~distribution facilities~~warehouse space under operating lease agreements that ~~are classified~~expire at various dates through September 2043. The Company’s leases generally have terms of up to 10 years, generally require a fixed annual rent and may require the payment of additional rent if store sales exceed a negotiated amount. Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through May 2024. The Company acts as ~~operating leases. Many of these operating leases include contingent rent provisions (percentage rent), and/or provide for~~sublessor in certain ~~landlord allowances~~leasing arrangements, primarily related to ~~tenant improvements and other relevant items.~~closed stores under its Michael Kors Retail Fleet Optimization Plan, as defined in Note 11. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. The ~~recognition~~Company determines the sublease term based on the date it provides possession to the subtenant through the expiration date of ~~rent expense for an~~the sublease.

The Company recognizes operating lease ~~commences on the earlier of the related~~right-of-use assets and lease liabilities at lease commencement date, orbased on the present value of fixed lease payments over the expected lease term. The Company uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, ~~of possession~~as the rate implicit in the lease is not readily determinable for the Company’s leases. The Company’s incremental borrowing rates are based on the term of the ~~property. Rent~~leases, the economic environment of the leases and reflect the expected interest rate it would incur to borrow on a secured basis. Certain leases include one or more renewal options, generally for the same period as the initial term of the lease. The exercise of lease renewal options is generally at the Company’s sole discretion and as such, the Company typically determines that exercise of these renewal options is not reasonably certain. As a result, the Company generally does not include the renewal option period in the expected lease term and the associated lease payments are not included in the measurement of the operating lease right-of-use asset and lease liability. Certain leases also contain termination options with an associated penalty. Generally, the Company is reasonably certain not to exercise these options and as such, they are not included in the determination of the expected lease term. The Company recognizes operating lease expense ~~is calculated by recognizing total minimum rental payments (net of any rental abatements, construction allowances and other rental concessions)~~ on a straight-line basis over the lease term.

Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. The ~~difference between~~Company recognizes lease expense for its short-term leases on a straight-line ~~rent expense~~basis over the lease term.

The Company’s leases generally provide for payments of non-lease components, such as common area maintenance, real estate taxes and ~~rent paid is recorded as deferred rent, which is classified within short-term and long-term liabilities in~~other costs associated with the ~~Company’s consolidated balance sheets.~~leased property. The Company accounts for ~~landlord allowances~~lease and ~~incentives~~non-lease components of its real estate leases together as a single lease component and, as such, includes fixed payments of ~~deferred rent, which is amortized over~~non-lease components in the measurement of the operating lease ~~term~~right-of-use assets and lease liabilities for its real estate leases. Variable lease payments, such as ~~a reduction~~percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of ~~rent expense.~~real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property are expensed as incurred as variable lease costs and are not recorded on the balance sheet. The ~~Company records rent expense as a component of selling, general~~Company’s lease agreements do not contain any material residual value guarantees or material restrictions or covenants.

Debt Issuance Costs and ~~administrative expenses.~~

~~Deferred Financing Costs~~Unamortized Discounts

The Company defers debt issuance costs directly associated with acquiring third party financing. These ~~deferred~~debt issuance costs and any discounts on issued debt are amortized on a straight-line basis, which approximates the effective interest method, as interest expense over the term of the related indebtedness. As of April 2, 2016, deferred financing costs were $3.9 million, net of accumulated amortization of $0.4 million. As of March 28, 2015 deferred financing costs were $2.1 million, net of accumulated amortization of $3.6 million. Deferred financing ~~costs~~fees associated with the Company’s revolving credit facilities are ~~included~~recorded within prepaid expenses and other current assets. Deferred financing fees and unamortized discounts associated with the Company’s other borrowings are recorded as an offset to long-term debt in ~~other assets on~~ the Company’s consolidated balance sheets. See Note 12 for additional information.

Net (Loss) Income per Share

The Company’s basic net (loss) income per ordinary share is calculated by dividing net ~~income~~loss by the weighted average number of ordinary shares outstanding during the period. Diluted net ~~income~~loss per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and restricted share units ~~(“RSUs”~~("RSUs"), were exercised or converted into ordinary shares. These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. Performance-based RSUs are

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included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.

The components of the calculation of basic net (loss) income per ordinary share and diluted net ~~income~~loss per ordinary share are as follows (in millions, except share and per share data):


	Fiscal Years Ended							Fiscal Years Ended
	April 2, 2016		March 28, 2015		March 29, 2014			March 28, 2020		March 30, 2019		March 31, 2018
Numerator:							Numerator:
Net income attributable to MKHL	$	839.1	$	881.0	$	661.5
Net (loss) income attributable to Capri							Net (loss) income attributable to Capri	$	(223)	$	543	$	592
Denominator:							Denominator:
Basic weighted average shares	186,293,295		202,680,572		202,582,945		Basic weighted average shares	150,714,598		149,765,468		152,283,586
Weighted average dilutive share equivalents:							Weighted average dilutive share equivalents:
Share options and restricted shares/units, and performance restricted share units	2,760,994		3,185,197		3,055,162		Share options and restricted shares/units, and performance restricted share units	—		1,848,882		2,819,299
Diluted weighted average shares	189,054,289		205,865,769		205,638,107		Diluted weighted average shares	150,714,598		151,614,350		155,102,885
Basic net income per share	$	4.50	$	4.35	$	3.27
Diluted net income per share	$	4.44	$	4.28	$	3.22
Basic net (loss) income per share ⁽¹⁾							Basic net (loss) income per share ⁽¹⁾	$	(1.48)	$	3.62	$	3.89
Diluted net (loss) income per share ⁽¹⁾							Diluted net (loss) income per share ⁽¹⁾	$	(1.48)	$	3.58	$	3.82

⁽¹⁾Basic and diluted net (loss) income per share are calculated using unrounded numbers.

Share equivalents for ~~2,255,271~~3,752,560 shares, ~~699,321~~1,409,415 shares and ~~44,256~~1,662,889 shares, for ~~fiscal years ending April 2, 2016, March 28, 2015~~Fiscal 2020, Fiscal 2019 and ~~March 29, 2014,~~Fiscal 2018, respectively, have been excluded from the above calculation due to their anti-dilutive effect.

Diluted net loss per share attributable to Capri for Fiscal 2020 excluded all potentially dilutive securities because there was a net loss attributable to Capri for the period and, as such, the inclusion of these securities would have been anti-dilutive.

Noncontrolling Interest and Redeemable Noncontrolling Interest

The Company has an ownership interest in the Michael Kors Latin American joint venture, MK (Panama) Holdings, S.A. and subsidiaries of 75%, an ownership interest in the Jimmy Choo EMEA Joint Ventures, JC Industry S.r.L of 33% and JC Gulf Trading LLC of 49%, a 50% ownership interest in J. Choo Russia J.V. Limited, and a 70% interest in Versace Australia PTY Limited (“Versace Australia”).

Recently Adopted Accounting Pronouncements

Lease Accounting

On March 31, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet for all leases, except certain short-term leases. In ~~November 2015,~~evaluating the impact of ASU 2016-02, the Company considered guidance provided by several additional ASUs issued by the FASB, including ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842” in January 2018, ASU 2018-10, “CodificationImprovements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” both issued in July 2018, and ASU ~~No. 2015-17, "Income Taxes~~2018-20, “Leases (Topic ~~740)~~842) - Narrow-Scope Improvements for Lessors” issued in December 2018. In connection with its implementation of ASU 2016-02, the Company adopted the package of three practical expedients, allowing it to carry forward its previous lease classification and embedded lease evaluations and not to reassess initial direct costs as of the date of adoption. The Company also adopted the practical expedient allowing it to combine lease and non-lease components for its real estate leases. Lastly, the Company adopted the practical expedient provided by ASU 2018-11, “Leases (Topic 842): ~~Balance Sheet Classification~~Targeted Improvements,” allowing it to recognize a cumulative-effect adjustment to the opening balance of ~~Deferred Taxes,"~~ retained earnings in the period of adoption without restating the comparative prior year periods.

The Company’s existing lease obligations, which ~~eliminated~~relate to stores, corporate locations, warehouses, and equipment, are subject to the ~~prior requirement~~new standard and resulted in recording of lease liabilities and right-of-use assets for operating leases on the Company’s consolidated balance sheet.

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The below table details the balance sheet adjustments recorded on March 31, 2019 in connection with the Company’s adoption of ASU 2016-02 (in millions):


	March 30, 2019 As Reported under ASC 840		ASC 842 Adjustments			March 31, 2019 As Reported Under ASC 842
Assets
Prepaid expenses and other current assets	$	221	$	(23)	⁽¹⁾	$	198
Operating lease right-of-use assets	—		1,876		⁽²⁾	1,876
Intangible assets, net	2,293		(40)		⁽³⁾	2,253
Deferred tax assets	112		38		⁽⁴⁾	150
Liabilities
Current portion of operating lease liabilities	—		386		⁽⁵⁾	386
Accrued expenses and other current liabilities	374		(72)		⁽⁶⁾	302
Long-term portion of operating lease liabilities	—		1,828		⁽⁵⁾	1,828
Deferred Rent	132		(132)		⁽⁷⁾	—
Deferred tax liabilities	438		(7)		⁽⁴⁾	431
Shareholders’ Equity
Retained earnings	4,707		(152)		⁽⁴⁾	4,555

⁽¹⁾Represents the reclassification of rent paid in advance to ~~present~~current operating lease liabilities.

⁽²⁾Represents the recognition of operating lease right-of-use assets, reflecting the reclassifications of deferred ~~tax~~rent, sublease liabilities, tenant allowances, and lease rights. This balance also reflects the initial impairments of the operating lease right-of-use assets recorded through retained earnings, as described below.

⁽³⁾Represents the reclassifications of lease rights for leases recorded in conjunction with the Company’s acquisitions to operating lease right-of-use assets.

⁽⁴⁾Represents the initial impairment recognized through retained earnings for certain underperforming retail store locations for which property and ~~liabilities as~~equipment were previously impaired, net of associated deferred taxes.

⁽⁵⁾Represents the recognition of current and ~~noncurrent in a classified balance sheet. ASU 2015-17 will require all deferred tax assets and~~non-current lease liabilities ~~to be classified as noncurrent. ASU 2015-17 is effective beginning~~for fixed payments associated with the ~~Company's Fiscal 2018, with earlier application permitted. The Company elected~~Company’s operating leases.

⁽⁶⁾Represents the reclassification of $54 million in sublease liabilities, primarily related to ~~early adopt ASU 2015-17 during~~Michael Kors retail stores closed under the ~~third quarter~~Michael Kors Retail Fleet Optimization Plan as defined in Note 10, as well as the reclassification of ~~Fiscal 2016 on a retrospective basis. As~~$18 million of ~~March 28, 2015, previously recorded current~~ deferred ~~tax assets~~rent and ~~liabilities~~tenant allowances to operating lease right-of-use assets.

⁽⁷⁾Represents the reclassification of ~~$27.7 million~~noncurrent deferred rent and ~~$3.7 million, respectively, were subject~~tenant improvement allowances to ~~reclassification to noncurrent. The Company's balance sheet as of March 28, 2015 also reflects a $7.3 million reclassification between total deferred tax assets and deferred tax liabilities due~~operating lease right-of-use assets.

See Note 4 for additional disclosures related to the ~~fact that jurisdictional netting is not impacted by ASU 2015-17.~~Company’s lease accounting policy.

Recently Issued Accounting Pronouncements

The Company has considered all new accounting pronouncements and ~~has~~have concluded that ~~with the exception of the below,~~ there are no new pronouncements that are ~~currently~~ expected to have a material impact on our results of operations, financial condition or cash ~~flows.~~flows based on current information.

Measurement of Credit Losses on Financial Instruments

~~Revenue Recognition~~

In ~~May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")No. 2014-09, “Revenue from Contracts with Customers~~,” which provides new guidance for revenues recognized from contracts with customers, and will replace the existing revenue recognition guidance. ASU No. 2014-09 requires that revenue is recognized at an amount the company is entitled to upon transferring control of goods or services to customers, as opposed to when risks and rewards transfer to a customer. In July 2015, the FASB issued ASU No. 2015-14, "~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,~~" which deferred the effective date of ASU No. 2014-09 by one year, making it effective for the interim reporting periods within the annual reporting period beginning after December 15, 2017, or beginning with the Company’s fiscal year 2019. This standard may be applied retrospectively to all prior periods presented, or retrospectively with a cumulative adjustment to retained earnings in the year of adoption. The Company is currently evaluating the adoption method and the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures.

~~The FASB has issued several additional ASUs to provide implementation guidance on ASU No. 2015-14, including ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)"~~ ~~issued in March 2016and ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing"~~ ~~issued in April 2016. The Company will consider this guidance in evaluating the impact of ASU 2014-09.~~

~~Lease Accounting~~

~~In February~~June 2016, the FASB issued ASU No. ~~2016-02, "Leases (Topic 842)~~2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”)," which amends the guidance on measuring credit losses for certain financial assets measured at amortized cost, including trade receivables. The FASB has subsequently issued several updates to the standard, providing additional guidance on certain topics covered by the standard. This update requires ~~lessees~~entities to recognize an allowance for credit losses using a ~~lease liability~~forward-looking expected loss impairment model, taking into consideration historical experience, current conditions, and ~~a right-to-use asset on the balance sheet for all leases, except certain short-term leases.~~supportable forecasts that impact collectibility. ASU ~~2016-02~~No. 2016-13 is effective for the Company beginning with the Company's fiscal year 2020, with early adoption permitted, and must be implemented using a modified restrospective approach for all leases existing at, or entered into after the beginning of the earliest comparative period that is presented in ~~the financial statements.~~its Fiscal 2021. The ~~Company is currently evaluating the impact of ASU 2016-09 on its consolidated financial statements but expects that the~~ adoption of this ~~standard will result in a significant increase in assets and liabilities on its consolidated balance sheets.~~

~~Share-Based Compensation~~

~~In March 2016, the the FASB issued ASU No. 2016-09, "Improvements~~update is not expected to ~~Employee Share-Based Payment Accounting~~," which simplifies accounting and presentation of share-based payments, primarily relating to the recognition and classification of excess tax benefits, accounting for forfeitures and tax withholding requirements. ASU 2016-09 is effective beginning with the Company's fiscal year 2018, with early adoption permitted and different permitted adoption methods for each provision of the standard. The Company is currently evaluating the impact of ASU 2016-09 on its consolidated financial statements.

~~In June 2014, the FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period~~,” ASU 2014-12 requires that a performance target under stock-based compensation arrangements that could be achieved after the service period is treated as a performance condition and not reflected in the grant-date fair value of the award. Rather, the related compensation cost should be recognized when it becomes probable that the performance targets will be achieved. ASU 2014-12 is effective beginning with the Company’s fiscal year 2017, with early adoption and retrospective application permitted. The Company does not expect that ASU 2014-12 will have a material impact on ~~its~~the Company's consolidated financial statements.

~~Business Combinations~~

~~In September 2015,~~

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3. Revenue Recognition

The Company accounts for contracts with its customers when there is approval and commitment from both parties, the ~~FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying~~rights of the ~~Accounting~~parties and payment terms have been identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for ~~Measurement-Period Adjustments," which simplifies~~goods or services.

The Company sells its products through three primary channels of distribution: retail, wholesale and licensing. Within the ~~accounting~~retail and wholesale channels, substantially all of the Company’s revenues consist of sales of products that represent a single performance obligation, where control transfers at a point in time to the customer. For licensing arrangements, royalty and advertising revenue is recognized over time based on access provided to the Company’s brands.

The Company has chosen to apply the practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations that have an expected duration of 12 months or less.

Retail

The Company generates sales through directly operated stores and e-commerce throughout the Americas (U.S., Canada and Latin America), EMEA (Europe, Middle East and Africa) and certain parts of Asia. Retail revenue is recognized when control of the product is transferred at the point of sale at Company owned stores, including concessions. For e-commerce transactions, control is transferred and revenue is recognized when products are delivered to the customer, net of estimated returns. To arrive at net sales for ~~adjustments made~~retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns.

Sales tax collected from retail customers are presented on a net basis and, as such, are excluded from revenue. Shipping and handling costs that are billed to ~~provisional amounts recognized~~customers are included in net sales, with the related costs recorded in cost of goods sold. Shipping and handling costs that are not billed to customers are accounted for as fulfillment costs.

Gift Cards. The Company sells gift cards that can be redeemed for merchandise, resulting in a ~~business combination by eliminating~~contract liability upon issuance. Revenue is recognized when the ~~requirement~~gift card is redeemed or upon “breakage” for the estimated portion of gift cards that are not expected to ~~retrospectively account~~be redeemed. “Breakage” revenue is calculated under the proportional redemption methodology, which considers the historical patterns of redemption in jurisdictions where the Company is not required to remit the value of the unredeemed gift cards as unclaimed property. The Company anticipates that substantially all of its outstanding gift cards will be redeemed within the next 12 months. The contract liability related to gift cards, net of estimated “breakage”, was $11 million and $13 million as of March 28, 2020 and March 30, 2019, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheet.

Loyalty Program. The Company offers a loyalty program, which allows its Michael Kors U.S. customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for ~~those adjustments~~purchases at Michael Kors retail stores and ~~requiring such adjustments~~e-commerce sites. The Company defers a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of an estimated “breakage,” of $2 million and $3 million as of March 28, 2020 and March 30, 2019, respectively, is recorded as a reduction to revenue in the consolidated statements of income and comprehensive income and within accrued expenses and other current liabilities in the Company’s consolidated balance sheet and is expected to be recognized within the next 12 months.

Wholesale

The Company’s products are sold primarily to major department stores, specialty stores and travel retail shops throughout the Americas, EMEA and Asia. The Company also has arrangements where its products are sold to geographic licensees in certain parts of EMEA, Asia and South America. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, when merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers. To arrive at net sales for wholesale, gross sales are reduced by provisions for estimated future returns, as well as trade discounts, markdowns, allowances, operational chargebacks and certain cooperative selling expenses. These estimates are developed based on historical trends, actual and forecasted performance and market conditions, and are reviewed by management on a quarterly basis. Unfulfilled, non-cancelable purchase orders for products from wholesale customers (including the Company’s geographic licensees) are expected to be fulfilled within the next 12 months.

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Licensing

The Company provides its third-party licensees with the right to access its Versace, Jimmy Choo and Michael Kors trademarks under product and geographic licensing arrangements. Under product licensing arrangements, the Company allows third parties to manufacture and sell luxury goods, including watches and jewelry, fragrances, sunglasses and eyewear, using the Company’s trademarks. Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa, certain parts of Asia and Australia.

The Company recognizes royalty revenue and advertising contributions based on the percentage of sales made by the licensees. Advertising contributions are received to support the Company’s branded advertising and marketing campaigns and are viewed as part of a single performance obligation with the right to access the Company’s trademarks. Royalty revenue generated from licenses, which includes contributions for advertising, may be subject to contractual minimum levels, as defined in the ~~reporting~~contract. Such minimums are generally fixed annually, based on the previous year’s sales. Licensing revenue is based on reported current period sales of licensed products at rates that are specified in the license agreements for contracts that are expected to exceed the related guaranteed minimums. If the Company expects the minimum guaranteed amounts to exceed amounts calculated based on actual sales, the guaranteed minimums are recognized ratably over the contractual year to which they relate. Generally the Company’s guaranteed minimum royalty amounts due from licensees relate to contractual periods that do not exceed 12 months, however, some of our guaranteed minimums for Versace are ~~determined. ASU 2015-16 requires disclosures~~multi-year based. As of ~~any amounts that would have been recorded in previous reporting periods if the adjustment was~~March 28, 2020, contractually guaranteed minimum fees from our license agreements expected to be recognized as revenue during future periods were as follows (in millions):


	Contractually Guaranteed Minimum Fees

Fiscal 2021	$	27
Fiscal 2022	26
Fiscal 2023	20
Fiscal 2024	10
Fiscal 2025	6
Fiscal 2026 and thereafter	29
Total	$	118

Sales Returns

For the sale of goods with a right of return, the Company recognizes revenue for the consideration to which it expects to be entitled and a refund liability for the amount it expects to refund to its customers within accrued expenses and other current liabilities. The refund liability is estimated based on management’s review of historical and current customer returns for its retail and wholesale customers, estimated future returns, adjusted for non-resalable products. The Company also considers its product strategies, as well as the financial condition of its customers, store closings by wholesale customers, changes in the retail environment and other macroeconomic factors. The Company recognizes an asset with a corresponding adjustment to cost of sales for the right to recover the products from its retail and wholesale customers. The refund liability recorded as of March 28, 2020 and March 30, 2019 was $37 million and $35 million, respectively, and the related asset for the right to recover returned product as of March 28, 2020 and March 30, 2019 was $14 million and $12 million, respectively.

Contract Balances

The Company’s contract liabilities are recorded within accrued expenses and other current liabilities and other long-term liabilities in its consolidated balance sheets depending on the short- or long-term nature of the ~~acquisition date. ASU 2015-16~~payments to be recognized. The Company’s contract liabilities primarily consist of gift card liabilities, loyalty program liabilities and advanced payments from product licensees. Total contract liabilities were $22 million and $31 million as of March 28, 2020 and March 30, 2019, respectively. Contract liabilities decreased $5 million as a result of the adoption of ASC 606 on April 1, 2018, due to recognition of gift card breakage revenue (see Note 2). During Fiscal 2020 and Fiscal 2019, the Company recognized $20 million and $16 million in revenue, respectively, relating to contract liabilities that existed at March 28, 2020 and March 30, 2019, respectively. There were 0 contract assets recorded as of March 28, 2020 and March 30, 2019.

There were no changes in historical variable consideration estimates that were materially different from actual results.

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Disaggregation of Revenue

The following table presents the Company’s segment revenues disaggregated by geographic location (in millions):


	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018

Versace revenue - the Americas	$	186	$	22	$	—
Versace revenue - EMEA	420		66		—
Versace revenue - Asia	237		49		—
Total Versace	843		137		—
Jimmy Choo revenue - the Americas	107		96		37
Jimmy Choo revenue - EMEA	282		321		123
Jimmy Choo revenue - Asia	166		173		63
Total Jimmy Choo	555		590		223
Michael Kors revenue - the Americas	2,822		3,064		2,996
Michael Kors revenue - EMEA	821		892		970
Michael Kors revenue - Asia	510		555		530
Total Michael Kors	4,153		4,511		4,496

Total revenue - the Americas	3,115		3,182		3,033
Total revenue - EMEA	1,523		1,279		1,093
Total revenue - Asia	913		777		593
Total revenue	$	5,551	$	5,238	$	4,719

4. Leases

The following table presents the Company’s supplemental balance sheet information related to leases (in millions):

Balance Sheet Location

March 28, 2020

Assets

Operating leases

Operating lease right-of-use assets

1,625

Liabilities

Current:

Operating leases

Short-term portion of operating lease liabilities

430

Non-current:

Operating leases

Long-term portion of operating lease liabilities

1,758

The components of net lease costs for the fiscal year ended March 28, 2020 were as follows (in millions):

Statement of Operations and
Comprehensive Income Location

March 28, 2020

Operating lease cost

Selling, general and administrative expenses

449

Short-term lease cost

Selling, general and administrative expenses

Variable lease cost⁽¹⁾

Selling, general and administrative expenses

155

Sublease income

Selling, general and administrative expenses

(6)

Total lease cost

616

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⁽¹⁾The Company elected to account for rent concessions negotiated in connection with COVID-19 as if it were contemplated as part of the existing contract and these concessions are recorded as variable lease expense. There is ~~effective beginning with~~an immaterial impact from these concession for the fiscal year ended March 28, 2020.

The following table presents the Company’s supplemental cash flow information related to leases (in millions):


	March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases		$	495
Non-cash transactions:
Lease assets obtained in exchange for new lease liabilities		$	428

The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance sheet as of March 28, 2020:


	March 28, 2020
Operating leases:
Weighted average remaining lease term (years)		6.6
Weighted average discount rate		2.9	%

At March 28, 2020, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):


	March 28, 2020
Fiscal 2021	$	489
Fiscal 2022	432
Fiscal 2023	369
Fiscal 2024	312
Fiscal 2025	239
Thereafter	566
Total lease payments	2,407
Less: interest	(219)
Total lease liabilities	$	2,188

At March 28, 2020, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):


	March 28, 2020
Fiscal 2021	$	6
Fiscal 2022	5
Fiscal 2023	5
Fiscal 2024	4
Fiscal 2025	4
Thereafter	12
Total sublease income	$	36

Additionally, the Company had approximately $13 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of March 28, 2020.

See Note 2 for additional information on the Company's ~~fiscal year 2017, with earlier application permitted, and should be applied prospectively. The Company is currently evaluating the impact~~accounting policies related to leases.

Table of ~~ASU 2015-15 on its consolidated financial statements.~~Contents

5. Acquisitions

~~Inventory Valuation~~

~~In July 2015, the FASB issued ASU No. 2015-11,~~ ~~"Inventory (Topic 330): Simplifying the Measurement of Inventory."~~ The new guidance requires inventory accounted for using the average cost or first-in first-out method ("FIFO") to be measured at the lower of cost or net realizable value, replacing the current requirement to value inventory at the lower of cost or market. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective beginning with the Company's fiscal year 2018 and should be applied prospectively, with earlier application permitted. The Company does not expect that ASU No. 2015-11 will have a material impact on its financial statements.

~~3. Acquisitions~~Fiscal 2020

Acquisition of ~~the Previously Licensed Business in South Korea~~Alberto Gozzi S.r.L.

On ~~January 1, 2016,~~December 16, 2019, the Company ~~acquired direct control of its previously licensed business~~entered into a definitive agreement to acquire Italian atelier and shoe manufacturer Alberto Gozzi S.r.L. The transaction was completed in ~~South Korea upon the related license expiration. In connection with the acquisition, the Company acquired certain net assets (including inventory and fixed assets) from~~ the Company's former licensee in exchange for cash consideration of approximately $3.6 million. The Company accounted for this acquisition as a business combination and began consolidating the South Korean business into its operations beginning with the fourth quarter of Fiscal ~~2016.~~ 2020 and the assets and liabilities acquired approximated fair value. The acquired identifiable assets and liabilities net to a nominal amount, with $11 million recognized in goodwill allocated to the Jimmy Choo reportable segment.

Fiscal 2019

Acquisition of Versace

On December 31, 2018, the Company completed the acquisition of Versace for a total enterprise value of approximately €1.753 billion (or approximately $2.005 billion), giving effect to an investment made by the Versace family at acquisition of 2.4 million shares. The acquisition was funded through a combination of borrowings under the Company’s 2018 Term Loan Facility, drawings under the Company’s Revolving Credit Facility and cash on hand (see Note 12 for additional information).

Versace’s results of operations have been included in our consolidated financial statements beginning on December 31, 2018. Versace contributed total revenue of $137 million and net loss of $12 million, after amortization of non-cash purchase accounting adjustments and transition and transaction costs, from the date of acquisition on December 31, 2018 through February 28, 2019 (reflecting a one-month reporting lag).

The Company recorded measurement period adjustments during Fiscal 2020. The measurement period adjustments are primarily related to conclusions reached on the ability to utilize certain deferred tax assets based on new facts and circumstances identified which existed at the acquisition date and if known, would have affected the measurement of the amounts recognized as of that date. The net measurement period adjustments increased goodwill by $26 million.

The following table summarizes the ~~fair values~~unaudited pro-forma consolidated results of operations for the ~~assets acquired~~fiscal years ended March 30, 2019 and ~~liabilities assumed~~March 31, 2018 as if the acquisition had occurred on April 2, 2017, the beginning of Fiscal 2018 (in millions):


	Fiscal Years Ended
	March 30, 2019		March 31, 2018
Pro-forma total revenue	$	5,983	$	5,473
Pro-forma net income	579		526
Pro-forma net income per ordinary share attributable to Capri:
Basic	$	3.82	$	3.40
Diluted	$	3.78	$	3.34

January 1, 2016
Inventory $ 3.0
Fixed assets 2.1
Customer relationship intangible assets 2.2
Fair value of assets acquired 7.3
Less: consideration paid 3.6
Gain on acquisition of MK Korea $ 3.7

~~This acquisition resulted in a gain of $3.7 million, representing~~The unaudited pro-forma consolidated results above are based on the ~~excess~~historical financial statements of the ~~fair value~~Company and Versace and are not necessarily indicative of the ~~assets acquired over~~results of operations that would have been achieved if the ~~consideration paid, which~~acquisition was ~~recorded in other income~~completed at the beginning of Fiscal 2018 and are not indicative of the future operating results of the combined company. The financial information for Versace prior to the acquisition has been included in the ~~Company's Consolidated Statement~~pro-forma results of ~~Operations~~operations on a calendar-year basis and ~~Comprehensive Income for Fiscal 2016.~~includes certain adjustments to Versace’s historical consolidated financial statements to align with U.S. GAAP and the Company’s accounting policies. The ~~purchase price was negotiated upon~~pro-forma consolidated results of operations also include the ~~natural expiration~~effects of the licensing agreement, which allowed the Company to negotiate favorable terms for the assets that could no longer be used by the licensee. Prior to recognizing a bargain purchase gain, the Company reassessed whether all assets acquired and liabilities assumed have been correctly identified, as well as the key valuation assumptions and business combination accounting procedures for this acquisition. After careful consideration and review, it was concluded that the recognition of a bargain purchase gain is appropriate for this acquisition.

~~The customer relationship intangible assets associated with the retail concession arrangements and wholesale relationships are being amortized over 5 years.~~

~~The Company is in the process of finalizing the~~ purchase accounting adjustments, including amortization charges related to the ~~MK Korea~~definite-lived intangible assets acquired, fair value adjustments relating to leases and property and equipment, and the related tax effects assuming that the business combination occurred on April 2, 2017. Purchase accounting amortization of the inventory step-up adjustment has been excluded from the above pro-forma amounts due to the short-term nature of this adjustment. The pro-forma consolidated financial statements also reflect the impact of debt repayment and borrowings made to finance the acquisition (see Note 12) and exclude historical interest expenses related to Versace’s €90 million pre-existing debt. Transaction costs of $41 million for Fiscal 2019, which ~~could result~~have been recorded within restructuring and other charges in ~~measurement period adjustments.~~the Company’s consolidated statements of operations and comprehensive income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature. The shares used to calculate the pro-forma net income per ordinary share attributable to Capri reflect the weighted average impact of a 2.4 million ordinary share investment made by the Versace family at acquisition date.

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Fiscal 2018

Acquisition of ~~Controlling Interest in a Joint Venture~~Jimmy Choo Group Limited

~~During the second quarter of Fiscal 2016,~~On November 1, 2017, the Company ~~made contributions~~completed the acquisition of Jimmy Choo, whereby the Company's wholly-owned subsidiary acquired all of Jimmy Choo’s issued and to ~~MK Panama totaling $18.5 million, consisting~~be issued shares at a purchase price of 230 pence per share in cash, ~~consideration~~for a total transaction value of ~~$3.0~~$1.447 billion, including the repayment of existing debt obligations, which was funded through a combination of borrowings under the Company’s new $1.0 billion term loan facility, the issuance of the Senior Notes and cash on hand (please refer to Note 12 for additional information).

Jimmy Choo’s results of operations have been included in our consolidated financial statements beginning on November 1, 2017. Jimmy Choo contributed revenue of $223 million and net loss of $15 million (after amortization of non-cash purchase accounting adjustments and transition and transaction costs) for the ~~elimination~~period from the date of liabilities owed to the Company of $15.5 million, which increased the Company's ownership interest to 75%. As a result of obtaining controlling interest in MK Panama, which was previously accounted for under the equity method of accounting, the Company began consolidating MK Panama into its operations during the second quarter of Fiscal 2016. The additional ownership interest provides the Company with more direct control over its operations in Latin America and will allow it to better manage its opportunities in the region.acquisition through March 31, 2018.

~~The Company accounted for its acquisition of controlling interest in MK Panama as a business combination during the second quarter of Fiscal 2016.~~ The following table summarizes the ~~fair values~~unaudited pro-forma consolidated results of operations for the ~~assets acquired~~fiscal years ended March 31, 2018 and ~~liabilities and non-controlling interest assumed~~April 1, 2017 as if the acquisition had occurred on April 3, 2016, the beginning of ~~the date the Company obtained control of MK Panama, inclusive of certain post-closing working capital adjustments~~Fiscal 2017 (in millions):


	Fiscal Years Ended
	March 31, 2018		April 1, 2017
Pro-forma total revenue	$	5,012	$	4,985
Pro-forma net income	623		554
Pro-forma net income per ordinary share attributable to Capri:
Basic	$	4.09	$	3.34
Diluted	$	4.02	$	3.29

June 28, 2015
Current assets $ 25.9
Fixed assets 6.4
Customer relationship intangible assets 2.0
Goodwill 9.2
Debt obligations (9.5 )
Other liabilities (2.3 )
Total fair value of net assets of MK Panama 31.7
Fair value of preexisting interest in MK Panama 8.1
Non-controlling interest 5.1
Fair value of consideration provided $ 18.5

~~In connection with this acquisition,~~The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company ~~recorded non-deductible goodwill~~and Jimmy Choo and are not necessarily indicative of ~~$9.2 million,~~the results of ~~which $8.0 million~~operations that would have been achieved if the acquisition was completed at the beginning of Fiscal 2017 and ~~$1.2 million was assigned~~are not indicative of the future operating results of the combined company. The financial information for Jimmy Choo prior to the ~~Company's retail~~acquisition has been included in the pro-forma results of operations on a calendar-year basis and ~~wholesale segments, respectively.~~includes certain adjustments to Jimmy Choo’s historical consolidated financial statements to align with U.S. GAAP and the Company’s accounting policies. The ~~customer relationship~~pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the definite-lived intangible assets ~~are being amortized over 10 years.~~acquired, fair value adjustments relating to leases and property and equipment, and the related tax effects assuming that the business combination occurred on April 3, 2016. Purchase accounting amortization of the inventory step-up adjustment has been excluded from the above pro-forma amounts due to the short-term nature of this adjustment. The ~~amount~~pro-forma consolidated financial statement also reflect the impact of debt repayment and borrowings made to finance the acquisition (see Note 12) and exclude historical interest expense for Jimmy Choo. Transaction costs of $41 million for Fiscal 2018, which have been recorded within restructuring and other charges in the ~~Company's~~Company’s consolidated ~~statement~~statements of operations ~~in connection with~~and comprehensive income, have been excluded from the ~~revaluation~~above pro-forma consolidated results of ~~its prior interest in MK Panama was not material.~~operations due to their non-recurring nature.

6. Receivables, net

Receivables, net consist of (in millions):


	March 28, 2020		March 30, 2019
Trade receivables ⁽¹⁾	$	432	$	459
Receivables due from licensees	14		23
	446		482
Less: allowances	(138)		(99)
	$	308	$	383

⁽¹⁾As of March 28, 2020 and March 30, 2019, $80 million and $317 million, respectively, of trade receivables were insured.

April 2,
2016 March 28,
2015
Trade receivables:
Credit risk assumed by insured/factors $ 353.7
$ 374.1
Credit risk retained by Company 61.8
67.5
Receivables due from licensees 9.5
11.8
425.0
453.4
Less allowances: (117.1 ) (90.0 )
$ 307.9
$ 363.4

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Receivables are presented net of allowances for ~~sales returns,~~ discounts, markdowns, operational chargebacks and doubtful accounts. ~~Sales returns are determined based on an evaluation of current market conditions and historical returns experience.~~ Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on wholesale ~~customers'~~customers’ sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in ~~net sales.~~revenues.

The Company has assumed responsibility for most of the previously factored accounts receivable balances during the periods presented. However, the majority of its trade receivables as of April 2, 2016 and March 28, 2015 are insured. TheCompany’s allowance for doubtful accounts is determined through analysis of periodic aging of receivables ~~for which credit risk is not assumed by the factors, or which~~that are not covered by insurance and assessments of collectability based on an evaluation of historic and anticipated trends, the financial ~~conditions~~condition of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered. Allowance for doubtful accounts was ~~$0.7~~$39 million as of ~~April 2, 2016 and~~ March 28, ~~2015.~~2020, including the impact related to COVID-19. Allowance for doubtful accounts was $18 million as of March 30, 2019, which included an $11 million allowance within the opening balance sheet of the newly acquired Versace business. The Company had bad debt expense of $29 million, $4 million and $8 million, respectively, for Fiscal 2020, Fiscal 2019 and Fiscal 2018.

7. Concentration of Credit Risk, Major Customers and Suppliers

Financial instruments that subject the Company to concentration of credit risk are cash and cash equivalents and receivables. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. The Company mitigates its risk by depositing cash and cash equivalents in major financial institutions. The Company also mitigates its credit risk by obtaining insurance coverage for a ~~substantial~~ portion of its receivables ~~(as demonstrated in the above table in “Credit risk assumed by insured/factors”)~~(see Note 6). For the fiscal years ended April 2, 2016, March 28, 2015 and March 29, 2014, net sales related to our largest wholesale customer, Macy's, accounted for approximately 12.7%, 13.7% and 14.4%, respectively, of total revenue. The accounts receivable related to this customer were either factored or substantially insured for all three fiscal years. No ~~other~~individual customer accounted for 10% or more of the Company’s total revenues during Fiscal ~~2016,~~2020, Fiscal ~~2015,~~2019 or Fiscal ~~2014.~~2018.

The Company contracts for the purchase of finished goods principally with independent third-party contractors, whereby the contractor is generally responsible for all manufacturing ~~processes, including the purchase of piece goods and trim.~~processes. Although the Company does not have any long-term agreements with any of its manufacturing contractors, the Company believes it has mutually satisfactory relationships with them. The Company allocates product manufacturing among agents and contractors based on their capabilities, the availability of production capacity, quality, pricing and delivery. The inability of certain contractors to provide needed services on a timely basis could adversely affect the Company’s operations and financial condition. For Fiscal 2020, Fiscal 2019 and Fiscal 2018, one contractor accounted for approximately 20%, 21% and 26%, respectively, of the Company’s total finished goods purchases, based on dollar volume.

The Company also has relationships with various agents who source ~~the Company’s~~ finished goods with numerous contractors on ~~the Company’s behalf.~~behalf of its Michael Kors brand. For ~~the fiscal years ended April 2, 2016, March 28, 2015~~Fiscal 2020, Fiscal 2019 and ~~March 29, 2014,~~Fiscal 2018, one agent sourced approximately ~~14.9%~~26%, ~~11.7%~~24% and ~~12.6%, respectively, and one contractor accounted for approximately 26.7%, 29.1% and 30.4%~~24%, respectively, of ~~the Company’s~~Michael Kors finished goods, ~~purchases.~~based on unit volume.

8. Property and Equipment, Net

Property and equipment, net, consists of (in millions):


	March 28, 2020		March 30, 2019
Leasehold improvements	$	704	$	639
In-store shops	236		270
Furniture and fixtures	329		292
Computer equipment and software	329		292
Equipment	136		123
Building	49		47
Land	19		15
	1,802		1,678
Less: accumulated depreciation and amortization	(1,310)		(1,115)
	492		563
Construction-in-progress	69		52
	$	561	$	615

April 2,
2016 March 28,
2015
Leasehold improvements $ 414.6
$ 294.2
In-store shops 242.9
189.3
Furniture and fixtures 212.7
160.2
Computer equipment and software 167.9
104.4
Equipment 79.1
73.6
Land 15.1
—
1,132.3
821.7
Less: accumulated depreciation and amortization (490.9 ) (337.8 )
641.4
483.9
Construction-in-progress 116.8
79.0
$ 758.2
$ 562.9

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Depreciation and amortization of property and equipment for the fiscal years ended ~~April 2, 2016,~~ March 28, ~~2015,~~2020, March 30, 2019, and March ~~29, 2014,~~31, 2018 was ~~$172.2~~$200 million, ~~$131.4~~$188 million and ~~$76.6~~$182 million, respectively. During ~~the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014,~~Fiscal 2020, the Company recorded ~~fixed asset~~property and equipment impairment charges of ~~$10.9~~$77 million, ~~$0.8~~$66 million of which related to the Company's retail store locations and $11 million of which related to determining asset groups for the Company’s premier store locations at an individual store level. See Note 14 for additional information. During Fiscal 2019 and Fiscal 2018, the Company recorded property and equipment impairment charges of $19 million and ~~$1.3~~$28 million, ~~respectively. Approximately $8.6 million of the Company's Fiscal 2016 impairment charges~~respectively, primarily related to ~~seven~~underperforming Michael Kors retail locations still in operation, $0.4 million related to its wholesale operations and $1.9 million related to a corporate fixed asset that is no longer in service. Fiscal 2015 impairment charges related to two retail locations and Fiscal 2014 impairment charges related to three retail locations, all of which were still in operation.locations.

9. Intangible Assets and Goodwill

The following table details the carrying values of the ~~Company's~~Company’s intangible assets ~~that are subject to amortization~~ other than goodwill (in millions):


	March 28, 2020										March 30, 2019
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Definite-lived intangible assets:
Reacquired rights	$	400	$	61	$	339	$	400	$	45	$	355
Trademarks	23		20		3		23		19		4
Lease rights ⁽¹⁾	—		—		—		96		56		40
Customer relationships	404		51		353		415		23		392
	827		132		695		934		143		791

Indefinite-lived intangible assets:
Jimmy Choo brand ⁽²⁾	547		180		367		572		—		572
Versace brand ⁽³⁾	924		—		924		930		—		930
	1,471		180		1,291		1,502		—		1,502

Total intangible assets, excluding goodwill	$	2,298	$	312	$	1,986	$	2,436	$	143	$	2,293

⁽¹⁾The March 30, 2019 balance includes certain lease rights that were reclassified to the operating lease right-of-use asset as part of the adoption of ASU 2016-02 in Fiscal 2020. Includes $2 million and $5 million, respectively, of impairment charges recorded during Fiscal 2019 and Fiscal 2018, primarily in connection with underperforming full-price Michael Kors retail stores. See Note 14 for additional information.

April 2, 2016 March 28, 2015

Gross
Carrying
Amount

Accumulated
Amortization
Net
Gross
Carrying
Amount

Accumulated
Amortization
Net
Trademarks $ 23.0
$ 15.1
$ 7.9
$ 23.0
$ 14.0
$ 9.0
Lease Rights 73.3
17.8
55.5
61.1
8.6
52.5
Customer Relationships 4.2
0.2
4.0
—
—
—
$ 100.5
$ 33.1
$ 67.4
$ 84.1
$ 22.6
$ 61.5
⁽²⁾The year-over-year change in carrying value reflects an impairment charge of $180 million and foreign currency translation of $25 million. The Company did 0t incur any impairment charges in prior periods.

⁽³⁾The year-over-year change in carrying value relates to foreign currency translation.

Reacquired rights relate to the Company’s reacquisition of the rights to use the Michael Kors trademarks and to import, sell, advertise and promote certain of its products in the previously licensed territories in the Greater China region and are being amortized through March 31, 2041, the expiration date of the related license agreement. The trademarks relate to the ~~Company’s~~Michael Kors brand name and are amortized over twenty years. Customer ~~lists~~relationships are amortized over five to ~~ten~~eighteen years. ~~Lease rights are~~Key money is amortized over the respective terms of the underlying lease, including highly probable renewal periods. Amortization expense for the Company’s definite-lived intangibles was ~~$11.0~~$49 million, ~~$7.0~~$37 million and ~~$3.1~~$26 million, respectively, for each of the fiscal years ended ~~April 2, 2016,~~ March 28, ~~2015~~2020, March 30, 2019 and March ~~29, 2014.~~31, 2018.

Indefinite-lived intangible assets other than goodwill included the Versace and Jimmy Choo brands, which were recorded in connection with the acquisitions of Versace and Jimmy Choo, and have an indefinite life due to being essential to the Company’s ability to operate the Versace and Jimmy Choo businesses for the foreseeable future.

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Estimated amortization expense for each of the next five years is as follows (in millions):

Fiscal 2017 $ 8.7
Fiscal 2018 8.7
Fiscal 2019 8.6
Fiscal 2020 8.6
Fiscal 2021 8.4
Thereafter 24.4
$ 67.4


Fiscal 2021	$	46
Fiscal 2022	46
Fiscal 2023	46
Fiscal 2024	45
Fiscal 2025	45
Fiscal 2026 and thereafter	467
	$	695

The future amortization expense above reflects weighted-average estimated remaining useful lives of ~~8.6~~21 years for ~~lease~~reacquired rights, ~~6.8~~3 years for trademarks and ~~6.9~~13 years for customer ~~lists. There were no impairment charges related to the Company’s lease rights, trademarks or customer lists during any of the periods presented.~~relationships.

The following table details the changes in goodwill for each of the ~~Company's~~Company’s reportable segments (in millions):


	Versace		Jimmy Choo		Michael Kors ⁽¹⁾		Total
Balance at March 31, 2018	$	—	$	728	$	120	$	848
Acquisition of Versace ⁽¹⁾	878		—		—		878
Foreign currency translation	(17)		(50)		—		(67)
Balance at March 30, 2019	861		678		120		1,659
Acquisition	—		11		—		11
Measurement period adjustment ⁽¹⁾	26		—		—		26
Impairment charges ⁽²⁾	—		(171)		—		(171)
Foreign currency translation	(6)		(31)		—		(37)
Balance at March 28, 2020	$	881	$	487	$	120	$	1,488

Retail Wholesale Licensing Total
Balance at March 28, 2015 $ —
$ 12.1
$ 1.9
$ 14.0
Acquisition of controlling interest in MK Panama (Note 3) 8.0
1.2
—
9.2
Balance at April 2, 2016 $ 8.0
$ 13.3
$ 1.9
$ 23.2

⁽¹⁾See Note 5 for additional information.

⁽²⁾The Company recorded impairment charges of $171 million related to the Jimmy Choo retail and licensing reporting units. The Company did 0t incur any goodwill impairment charges in prior periods.

The ~~Company's~~Company’s goodwill isand the Versace and Jimmy Choo brands are not subject to amortization but isare evaluated for impairment annually in the last quarter of each fiscal year, or whenever impairment indicators exist. During the fourth quarter of Fiscal 2020, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for its 3 segments. The Company ~~evaluated~~performed its goodwill impairment assessment for its Michael Kors segment using a qualitative assessment. As a result of realigning its segment reporting structure during the fourth ~~fiscal~~ quarter of Fiscal ~~2016,~~2019, the Company presented the carrying amount of goodwill for the Michael Kors Retail, Michael Kors Wholesale and ~~determined~~Michael Kors Licensing reporting units within the Michael Kors reportable segment. Based on the results of the Company’s qualitative impairment assessment, the Company concluded that it is more likely than not that the fair value of the Michael Kors’ reporting units exceeded their carrying value and, therefore, were not impaired.

The Company performed its annual goodwill and indefinite-lived intangible asset impairment analysis for both the Versace and Jimmy Choo reporting units using a quantitative approach, using a discounted cash flow analysis to estimate the fair values of the each brands' reporting units. Based on the results of these assessments, the Company concluded that the fair values of the Jimmy Choo retail and licensing reporting units and the Jimmy Choo brand indefinite-lived intangible asset did not exceed the related carrying amounts. Jimmy Choo expects to experience a reduction in profitability trends, primarily related to the ongoing impact of the COVID-19 pandemic, resulting in declines in sales driven by the full and partial closures of a significant portion of our stores globally.

The Company also concluded that the fair values of the Versace reporting units and the Versace brand indefinite-lived intangible asset exceeded the related carrying amounts and there was no impairment ~~(See Note 11 for additional information). As~~recorded.

Accordingly, the Company recorded impairment charges of ~~April 2, 2016, cumulative impairment related to goodwill totaled $5.4 million. There were no charges~~$171 million related to the Jimmy Choo retail and licensing reporting units and $180 million related to the Jimmy Choo brand intangible asset during Fiscal 2020. The impairment charges were recorded within impairment of ~~goodwill in any~~assets on the Company's consolidated statement of operations and comprehensive income for the ~~periods presented.~~fiscal year ended March 28, 2020. See Note 14 to the accompanying audited financial statements for information relating to its annual impairment analysis performed during the fourth quarter of Fiscal 2020.

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10. Current Assets and Current Liabilities

Prepaid expenses and other current assets consist of the following (in millions):


	April 2, 2016		March 28, 2015			March 28, 2020		March 30, 2019
Prepaid taxes	$	57.8	$	60.8	Prepaid taxes	$	116	$	125
Prepaid contracts					Prepaid contracts	17		15
Other accounts receivables					Other accounts receivables	10		10
Interest receivable related to net investment hedges					Interest receivable related to net investment hedges	1		11
Prepaid rent	27.3		16.8		Prepaid rent	—		24
Leasehold incentive receivable	8.9		12.3
Unrealized gains on forward foreign exchange contracts	0.1		25.0
Other	19.0		12.6		Other	23		36
	$	113.1	$	127.5		$	167	$	221

Accrued expenses and other current liabilities consist of the following (in millions):


	March 28, 2020		March 30, 2019
Other taxes payable	$	38	$	47
Return liabilities	37		35
Accrued capital expenditures	31		25
Gift cards and retail store credits	11		13
Accrued rent ⁽¹⁾	10		34
Professional services	10		12
Accrued litigation	10		11
Restructuring liability ⁽²⁾	9		64
Accrued advertising and marketing	9		10
Accrued interest	8		10
Accrued purchases and samples	3		29
Other	65		84
	$	241	$	374

⁽¹⁾The accrued rent balance relates to variable lease payments.

⁽²⁾In connection with the adoption of ASU 2016-02, certain lease related assets and liabilities were reflected within operating lease right-of-use assets and liabilities as of March 28, 2020. See Note 2 and Note 4 for additional information.

11. Restructuring and Other Charges

Michael Kors Retail Fleet Optimization Plan

During Fiscal 2020, the Company completed its plan to close between 100 and 150 of its Michael Kors retail stores in order to improve the profitability of its retail store fleet (“Michael Kors Retail Fleet Optimization Plan”). The Company expected approximately $100 - $125 million of one-time costs associated with these store closures, with total costs in line with its original expectations. Collectively, the Company continues to anticipate ongoing savings as a result of the store closures and lower depreciation expense associated with the impairment charges being recorded.

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April 2,
2016 March 28,
2015
Accrued capital expenditures $ 33.6
$ 32.9
Advance royalties 30.2
5.1
Other taxes payable 38.2
20.2
Accrued rent 30.5
27.1
Gift cards and retail store credits 13.1
8.2
Professional services 7.0
7.3
Unrealized loss on forward foreign exchange contracts 5.5
0.6
Accrued advertising 5.2
5.7
Accrued litigation 1.8
6.2
Other 27.7
10.5
$ 192.8
$ 123.8
During Fiscal 2020, the Company closed 43 of its Michael Kors retail stores under the Michael Kors Retail Fleet Optimization Plan, for a total of 143 stores closed at a cost of $99 million since plan inception. Restructuring charges recorded in connection with the Michael Kors Retail Fleet Optimization Plan during Fiscal 2020 was $5 million. The below table presents a rollforward of the Company’s remaining restructuring liability related to this plan (in millions):


	Severance and benefit costs		Lease-related and other costs		Total
Balance at March 30, 2019	$	2	$	53	$	55
ASC 842 (Leases) Adjustment ⁽¹⁾	—		(46)		(46)
Balance at March 31, 2019	2		7		9
Additions charged to expense	—		5		5

Payments	(1)		(8)		(9)
Balance at March 28, 2020	$	1	$	4	$	5

⁽¹⁾Consists of the reclassification of sublease liabilities to an offset of the related operating lease right-of-use asset due to the adoption of ASC 842. See Note 2 and Note 4 for further information.

During Fiscal 2019, the Company recorded restructuring charges of $41 million under the Michael Kors Retail Fleet Optimization Plan, which were comprised of lease-related charges of $38 million and severance and benefit costs of $3 million. During Fiscal 2018, the Company recorded restructuring charges of $53 million under the Michael Kors Retail Fleet Optimization Plan, which were comprised of lease-related charges of $52 million and severance and benefit costs of $1 million.

Other Restructuring Charges

In addition to the restructuring charges related to the Michael Kors Retail Fleet Optimization Plan, the Company incurred charges of $3 million primarily consisting of lease-related costs during Fiscal 2020. The Company also incurred charges of $4 million relating to Jimmy Choo lease-related charges during Fiscal 2019.

Other Costs

During Fiscal 2020, the Company recorded costs of $34 million, which included $24 million in connection with the Versace acquisition and $9 million in connection with the acquisition of Jimmy Choo, and $1 million in connection with the acquisition of Gozzi.

During Fiscal 2019, the Company recorded costs of $79 million, which included $52 million in connection with the Versace acquisition and $27 million in connection with the Jimmy Choo acquisition. During Fiscal 2018, the Company recorded costs of $49 million in connection with the Jimmy Choo acquisition. See Note 5 for additional information relating to these acquisitions.

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12. Debt Obligations

The following table presents the Company’s debt obligations (in millions):


	March 28, 2020		March 30, 2019
Term Loan⁽¹⁾	$	1,015	$	1,580
4.000% Senior Notes due 2024	450		450
Revolving Credit Facilities	720		550
Other	3		1
Total debt	2,188		2,581
Less: Unamortized debt issuance costs	8		13
Less: Unamortized discount on long-term debt	1		2
Total carrying value of debt	2,179		2,566
Less: Short-term debt	167		630
Total long-term debt	$	2,012	$	1,936

⁽¹⁾During Fiscal 2019, the Company repaid the remaining $59 million of borrowings outstanding under the previous Term Loan Facility entered into in connection with the Jimmy Choo acquisition.

Senior Unsecured Revolving Credit Facility

On ~~October 29, 2015,~~March 20, 2020, the Company entered into anthe first amendment (the “First Amendment”) to its third amended and restated senior unsecured ~~revolving~~ credit facility, ~~("2015~~dated as of November 15, 2018 (the “2018 Credit ~~Facility"~~Facility”), with, among others, JPMorgan Chase Bank, N.A. ~~("JPMorgan Chase")~~, as administrative ~~agent, which replaced its prior 2013 senior unsecured revolving credit facility ("2013~~agent. The First Amendment amends the 2018 Credit ~~Facility").~~Facility to, among other things, provide for the exchange of approximately $267 million (out of $315 million) in aggregate principal amount of outstanding term loans due on the second anniversary, for term loans with the existing remaining tranche that matures on the fifth anniversary, resulting in the extension of the maturity of such exchanged loans to the third quarter of Fiscal 2024. The remaining $48 million that were not exchanged remain due in the third quarter of Fiscal 2021. In addition, the leverage ratio covenant metric in the 2018 Credit Facility was modified to take into account operating lease liability as defined by ASC 842. The Company and aits U.S., Canadian, Dutch and Swiss ~~subsidiary~~subsidiaries are the borrowers under the ~~2015~~2018 Credit Facility. The borrowers and certain material subsidiaries of the Company provide unsecured guarantees of the ~~2015~~2018 Credit Facility. The ~~2015~~2018 Credit Facility provides for ~~up to~~a $1.0 billion ~~in borrowings,~~revolving credit facility (the “Revolving Credit Facility”), which may be denominated in U.S. Dollars and other currencies, including Euros, Canadian Dollars, Pounds Sterling, Japanese Yen and Swiss Francs. The ~~2015~~Revolving Credit Facility also provides sub-facilities for the issuance of letters of credit of up to ~~$75.0~~$75 million and swing line loans of up to ~~$50.0~~$75 million. The 2018 Credit Facility also provides for a $1.6 billion term loan facility (the “2018 Term Loan Facility”) to finance a portion of the purchase price of the Company’s acquisition of Versace. The 2018 Term Loan Facility is divided into 2 tranches that now mature on the fifth anniversary of the initial borrowing of the term loans, except for the remaining $48 million that were not exchanged, and are required to be repaid on the last business day of March, June, September and December of each year, commencing after the last business day of the first full fiscal quarter after the initial borrowing, in installments equal to 2.50% of the aggregate original principal amount of the term loans. The Company has the right to prepay its borrowings under the 2018 Term Loan Facility at any time in whole or in part. The Revolving Credit Facility expires on November 15, 2023. The Company has the ability to expand its borrowing availability under the ~~2015~~2018 Credit Facility in the form of revolving commitments or term loans by up to an additional ~~$500.0~~$500 million, subject to the agreement of the participating lenders and certain other customary conditions. ~~The 2015 Credit Facility expires on October 29, 2020.~~

Borrowings under the ~~2015~~Revolving Credit Facility bear interest, at the ~~Company's~~Company’s option, at ~~(i)~~ the following rates:

•for any loans (except loans denominated in Canadian Dollars), the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt rating;

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•for loans denominated in U.S. Dollars, an ~~alternative~~alternate base rate, which is the ~~greater of~~greatest of: (a) the prime rate publicly announced from time to time by JPMorgan Chase, (b) the greater of the federal funds effective rate orand the Federal Reserve Bank of New York overnight bank funding rate and zero, plus 50 basis points, orand (c) the greater of the one-month London Interbank Offered Rate adjusted for statutory reserve requirements for Eurocurrency liabilities ("(“Adjusted ~~LIBOR"~~LIBOR”) and zero, plus 100 basis points, in each case, plus an applicable margin based on the ~~Company's leverage ratio; (ii) Adjusted LIBOR~~ Company’s public debt ratings;

•for ~~the applicable interest period, plus an applicable margin based on the Company's leverage ratio; (iii) for~~loans denominated in Canadian ~~borrowings,~~Dollars, the Canadian prime rate, which is the greater of the PRIMCAN Index rate orand the rate applicable to one-month Canadian Dollar ~~banker's~~banker’s acceptances quoted on Reuters ~~("CDOR"~~(“CDOR”), plus 100 basis points, plus an applicable margin based on the ~~Company's leverage ratio;~~Company’s public debt ratings; or ~~(iv)~~

•for loans denominated in Canadian ~~borrowings,~~Dollars, the average CDOR rate for the applicable interest period, plus 10 basis points per annum, plus an applicable margin based on the ~~Company's leverage ratio.~~Company’s public debt ratings.

Borrowings under the 2018 Term Loan Facility bear interest, at the Company’s option, at (a) the alternate base rate plus an applicable margin based on the Company’s public debt ratings; or (b) the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt ratings.

The ~~2015~~Revolving Credit Facility also provides for an annual administration fee and a commitment fee equal to 0.10% to ~~0.175%~~0.25% per annum, based on the ~~Company's leverage ratio,~~Company’s public debt ratings, applied to the average daily unused amount of the ~~facility.~~Revolving Credit Facility. The 2018 Term Loan Facility provides for a commitment fee equal to 0.10% to 0.25% per annum, based on the Company’s public debt ratings, applied to the undrawn amount of the 2018 Term Loan Facility, from January 6, 2019 until the term loans are fully drawn or the commitments under the 2018 Term Loan Facility terminate or expire. Loans under the ~~2015~~2018 Credit Facility may be ~~prepaid~~repaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than the customary ~~"breakage"~~breakage costs with respect to loans bearing interest based ~~upon~~on Adjusted LIBOR or the CDOR rate.

~~The 2015~~As of the last day of Fiscal 2020, the 2018 Credit Facility ~~requires~~required the Company to maintain a leverage ratio atas of the end of each fiscal quarter of no greater than ~~3.5~~3.75 to 1. Such leverage ratio is calculated asbased on the ratio of ~~the sum of~~consolidated total indebtedness asplus the capitalized amount of ~~the date of the measurement plus 6.0 times the~~all operating lease liabilities presented on our consolidated ~~rent expense for the last four consecutive fiscal quarters,~~balance sheets to Consolidated EBITDAR (as defined below) for the last four consecutive fiscal quarters. Consolidated EBITDAR is defined as consolidated net income plus income tax expense, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash charges, subject to certain additions and deductions. The ~~2015~~2018 Credit Facility also includes covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash dividends that are customary for financings of this type. See Note 23 for additional information. As of ~~April 2, 2016,~~March 28, 2020 and the date these financial statements were issued, the Company was in compliance with all covenants related to this agreement.

The ~~2015~~2018 Credit Facility contains events of default customary for financings of this type, including, but not limited to, payment of defaults, material inaccuracy of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy or insolvency, certain events under ~~ERISA,~~The Employee Retirement Income Security Act, material judgments, actual or asserted failure of any guaranty supporting the ~~2015~~2018 Credit Facility to be in full force and effect, and ~~change~~changes of control. If such an event of default occurs, the lenders under the ~~2015~~2018 Credit Facility would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the ~~2015~~2018 Credit Facility, subject to “certain funds” limitations in connection with the transaction governing the 2018 Term Loan Facility.

In connection with the acquisition of Versace, on December 21, 2018 the Company borrowed $1.6 billion in term loans under the 2018 Term Loan Facility and $350 million under its $1.0 billion Revolving Credit Facility provided for under the 2018 Credit Facility, to pay a portion of the acquisition consideration and other related fees and expenses. As of ~~April 2, 2016~~March 28, 2020 and March ~~28, 2015, there were no~~30, 2019, the Company had borrowings of $681 million and $539 million outstanding under the ~~2015~~2018 Revolving Credit Facility, ~~or the prior 2013 Credit Facility. At April 2, 2016,~~respectively, which were recorded within long-term and short-term debt in its consolidated balance sheets. In addition, stand-by letters of credit of ~~$10.0~~$18 million were outstanding ~~under the 2015 Credit Facility.~~as of March 28, 2020. At ~~April 2, 2016,~~March 28, 2020, the amount available for future borrowings under the 2018 Revolving Credit Facility was ~~$990.0~~$301 million. As of March 28, 2020, the carrying value of borrowings outstanding under the 2018 Term Loan Facility was $1.010 billion, net of debt issuance costs of $5 million, of which $128 million was recorded within short-term debt and $882 million was recorded within long-term debt in its consolidated balance sheets.

~~Debt Obligations~~

Table of ~~MK Panama~~Contents

~~During~~Senior Notes

On October 20, 2017, Michael Kors (USA), Inc. (the “Issuer”), the ~~second quarter~~Company’s wholly owned subsidiary, completed its offering of ~~Fiscal 2016,~~$450 million aggregate principal amount of 4.000% senior notes due 2024 (the “Senior Notes”) at an issue price of 99.508% of aggregate principal amount, pursuant to an exemption from registration under the Securities Act of 1933, as amended. The Senior Notes were issued under an indenture dated October 20, 2017, among the Issuer, the Company, ~~obtained controlling~~the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (the “Indenture”). The Senior Notes were issued to finance a portion of the Company’s acquisition of Jimmy Choo and certain related refinancing transactions.

The Senior Notes bear interest ~~in MK Panama~~at a rate of 4.000% per year, subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency therefore) downgrades (or downgrades and ~~began consolidating its financial results into its operations (see Note 3 for additional information). MK Panama's debt obligations included~~subsequently upgrades) the credit rating assigned to the Senior Notes. Interest on the ~~Company's~~Senior Notes is payable semi-annually on May 1 and November 1 of each year, beginning on May 1, 2018.

The Senior Notes are unsecured and are guaranteed by the Company and its existing and future subsidiaries that guarantee or are borrowers under the 2018 Credit Facility (subject to certain exceptions, including subsidiaries organized in China).

The Senior Notes may be redeemed at the Company’s option at any time in whole or in part at a price equal to 100% of the principal amount, plus accrued and unpaid interest, plus a “make-whole” amount calculated at the applicable Treasury Rate plus 30 basis points.

The Senior Notes rank equally in right of payment with all of the Issuer’s and guarantors’ existing and future senior unsecured indebtedness, senior in right of payment to any future subordinated indebtedness, effectively subordinated in right of payment to any of the Company’s subsidiaries’ obligations (including secured and unsecured obligations) and any of the Company’s secured obligations, to the extent of the assets securing such obligations.

The Indenture contains covenants, including those that limit the Company’s ability to create certain liens and enter into certain sale and leaseback transactions. In the event of a “Change of Control Triggering Event,” as defined in the Indenture, the Issuer will be required to make an offer to repurchase the Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the Senior Notes being repurchased plus any unpaid interest. These covenants are subject to important limitations and exceptions, as per the Indenture.

As of March 28, 2020 and March 30, 2019, the carrying value of the Senior Notes was $446 million and $445 million, respectively, net of issuance costs and unamortized discount.

Japan Credit Facility

In November 2017, the Company’s subsidiary in Japan entered into a short term credit facility (“Japan Credit Facility”) with Mitsubishi UFJ Financial Group (“MUFJ”), which may be used to fund general working capital needs of Michael Kors Japan K.K., subject to the bank’s discretion. The Japan Credit Facility is in effect through November 30, 2020. The Japan Credit Facility provides Michael Kors Japan K.K. with a revolving credit line of up to ¥1.0 billion (approximately $9 million). The Japan Credit Facility bears interest at a rate posted by the Bank plus 0.300% two business days prior to the date of borrowing or the date of interest renewal. As of March 28, 2020 and March 30, 2019, the Company had 0 borrowings outstanding under the Japan Credit Facility.

Hong Kong Credit Facility

In May 2020, the Company’s Hong Kong subsidiary, MKHKL, renewed its uncommitted credit facility (“HK Credit Facility”) with HSBC, which may be used to fund general working capital needs of MKHKL through April 30, 2021 subject to the bank’s discretion. The HK Credit Facility provides MKHKL with a revolving line of credit of up to 100 million Hong Kong Dollars (approximately $14 million), and may be used to support bank guarantees. Borrowings under the HK Credit Facility must be made in increments of at least 5 million Hong Kong Dollars and bear interest at the Hong Kong Interbank Offered Rate (“HIBOR”) plus 150 basis points. As of March 28, 2020 and March 30, 2019, there were 0 borrowings outstanding under the HK Credit Facility. As of March 28, 2020, bank guarantees supported by this facility were 4 million Hong Kong Dollars (approximately $1 million). At March 28, 2020, the amount available for future borrowings under the HK Credit Facility was 96 million Hong Kong Dollars (approximately $13 million).

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China Credit Facility

In January 2019, the Company’s subsidiary in China, MKTSCL, entered into a short-term credit facility (“China Credit Facility”) with HSBC, which may be used to fund general working capital needs, not to exceed 12 months. The China Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 70 million (approximately $10 million); an overdraft facility with a credit line of RMB 10 million (approximately $1 million), and a non-financial bank guarantee facility of RMB 20 million (approximately $3 million) or its equivalent in another currency, at lender’s discretion. Borrowings under the China Credit Facility bear interest at 105% of the applicable People’s Bank of China’s Benchmark lending rate at the time of borrowing. As of March 28, 2020, the Company had 0 borrowings outstanding under the China Credit Facility.

Versace Credit Facilities

In June 2019, the Company’s subsidiary, Versace, entered into 2 uncommitted short-term credit facilities, one with Unicredit and the other with Intesa (“Versace Credit Facilities”), which may be used for general working capital needs of Versace. The Versace Credit Facilities provide Versace with a swing line of credit of up to €32 million (approximately $36 million), with interest set by the bank on the date of borrowing. As of March 28, 2020, there were borrowings outstanding of €25 million (approximately $28 million), which were recorded within short-term debt in the Company’s consolidated balance ~~sheet as~~sheet.

In January 2018, Versace entered into an uncommitted short-term credit facility with BNL (“Versace Credit Facility”), which may be used for general working capital needs of ~~April 2, 2016 are as follows (in millions):~~Versace. The Versace Credit Facility provides Versace with a swing line of credit of up to €20 million (approximately $22 million), with interest set by the bank on the date of borrowing. As of March 28, 2020, there were borrowings outstanding of €10 million (approximately $11 million), which were recorded within short-term debt in the Company’s consolidated balance sheet.


British Virgin Islands			N/A
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Ordinary Shares, no par value	CPRI	New York Stock Exchange



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.		ý☒ Yes¨	☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.		¨☐ Yesý	☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.		☒ Yes	ý ~~Yes~~ ¨☐ No
Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).		☒ Yes	ý ~~Yes~~ ¨☐ No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.	ý



Large accelerated filer	ý☒	Accelerated filer	¨☐
Non-accelerated filer	¨ ~~(Do not check if smaller reporting company)~~ ☐	Smaller reporting company	¨


					Page
			PART I

				~~Page~~
Item 1	~~PART I~~

~~Item 1~~	Business	4
Item 1A			Risk Factors		1114
Item 1B			Unresolved Staff Comments		2230
Item 2			Properties		2230
Item 3			Legal Proceedings		2231
Item 4			Mine Safety Disclosures		2231

			PART II

Item 5			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		2332
Item 6			Selected Financial Data		2434
Item 7			Management’s Discussion and Analysis of Financial Condition and Results of Operations		2636
Item 7A			Quantitative and Qualitative Disclosures About Market Risk		4856
Item 8			Financial Statements and Supplementary Data		4857
Item 9			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		4857
Item 9A			Controls and Procedures		4958
Item 9B			Other Information		59

			PART III

Item 10			Directors, Executive Officers and Corporate Governance		5060
Item 11			Executive Compensation		5060
Item 12			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		5060
Item 13			Certain Relationships and Related Transactions and Director Independence		5060
Item 14			Principal ~~Accountant~~Accounting Fees and Services		5060

			PART IV

Item 15			Exhibits and Financial Statement Schedules		5161



ý☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



						~~Michael Kors Holdings Limited~~ ~~(Exact Name of Registrant as Specified in Its Charter)~~


	Fiscal Years Ended
	March 28, 2020		% of Total	March 30, 2019		% of Total	March 31, 2018		% of Total
Accessories	$	2,933	52.8%	$	3,139	59.9%	$	3,057	64.8%
Footwear	1,100		19.8%	1,023		19.5%	657		13.9%
Apparel	1,069		19.3%	698		13.3%	605		12.8%
Licensed product	222		4.0%	218		4.2%	250		5.3%
Licensing revenue	201		3.6%	156		3.0%	150		3.2%
Other	26		0.5%	4		0.1%	—		—%
Total revenue	$	5,551		$	5,238		$	4,719


⁽¹⁾	In May 2015, we acquired land in Venlo, Holland and are currently in the process of building our own distribution facility, which will support all of our European operations. The new facility is expected to begin operating in Fiscal 2017.


~~Item 5.~~	~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~



	High		Low
Fiscal 2015 Quarter Ended:
June 28, 2014	$	98.96	$	85.71
September 27, 2014	$	91.79	$	71.25
December 27, 2014	$	79.70	$	68.25
March 28, 2015	$	76.05	$	63.31

Fiscal 2016 Quarter Ended:
June 27, 2015	$	66.26	$	44.91
September 26, 2015	$	45.37	$	38.06
December 26, 2015	$	43.89	$	38.53
April 2, 2016	$	58.54	$	35.57


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximated Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (in millions)
December 29 – January 25	—	$	—	—	$	400
January 26 – February 22	—	$	—	—	$	400
February 23 – March 28	—	$	—	—	$	400
	—			—



	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares (or Units) That May Yet be Purchased Under the Plans or Programs
December 27 – January 23	—	$	—	—	$	558,054,655
January 24 – February 20	1,553,900	51.96		1,553,900	477,316,788
February 21 – April 2	2,136,785	55.81		2,136,785	358,054,655



	Fiscal Years Ended
	April 2, 2016⁽¹⁾			March 28, 2015			March 29, 2014		March 30, 2013		March 31, 2012
	(data presented in millions, except for shares and per share data)
Statement of Operations Data:
Net sales	$	4,538.8		$	4,199.7		$	3,170.5	$	2,094.7	$	1,237.1
Licensing revenue	173.3			171.8			140.3		87.0		65.2
Total revenue	4,712.1			4,371.5			3,310.8		2,181.7		1,302.3
Cost of goods sold	1,914.9			1,723.8			1,294.7		875.1		549.2
Gross profit	2,797.2			2,647.7			2,016.1		1,306.6		753.1
Selling, general and administrative expenses	1,428.0			1,251.5			926.9		621.6		464.6
Depreciation and amortization	183.2			138.4			79.7		54.3		37.5
Impairment of long-lived assets	10.9			0.8			1.3		0.7		3.3
Total operating expenses	1,622.1			1,390.7			1,007.9		676.6		505.4
Income from operations	1,175.1			1,257.0			1,008.2		630.0		247.7
Other income	(3.7		)	(1.6		)	—		—		—
Interest expense, net	1.7			0.2			0.4		1.5		1.5
Foreign currency loss (gain)	4.8			2.6			0.1		1.4		(2.6		)
Income before provision for income taxes	1,172.3			1,255.8			1,007.7		627.1		248.8
Provision for income taxes	334.6			374.8			346.2		229.5		101.5
Net income	837.7			881.0			661.5		397.6		147.3
Less: net income applicable to preference shareholders	—			—			—		—		21.2
Less: Net loss attributable to noncontrolling interest	(1.4		)	—			—		—		—
Net income available for ordinary shareholders of MKHL	$	839.1		$	881.0		$	661.5	$	397.6	$	126.1

Weighted average ordinary shares outstanding⁽²⁾:
Basic	186,293,295			202,680,572			202,582,945		196,615,054		158,258,126
Diluted	189,054,289			205,865,769			205,638,107		201,540,144		189,299,197
Net income per ordinary share⁽³⁾:
Basic	$	4.50		$	4.35		$	3.27	$	2.02	$	0.80
Diluted	$	4.44		$	4.28		$	3.22	$	1.97	$	0.78



	Fiscal Years Ended						% Change				% of Total Revenue for Fiscal 2016		% of Total Revenue for Fiscal 2015
	April 2, 2016		March 28, 2015		$ Change		As Reported		Constant Currency		% of Total Revenue for Fiscal 2016		% of Total Revenue for Fiscal 2015
Revenue:
Net sales: Retail	$	2,394.9	$	2,134.6	$	260.3	12.2	%	17.2	%	50.8	%	48.8	%
Wholesale	2,143.9		2,065.1		78.8		3.8	%	6.8	%	45.5	%	47.3	%
Licensing	173.3		171.8		1.5		0.9	%	0.9	%	3.7	%	3.9	%
Total revenue	$	4,712.1	$	4,371.5	$	340.6	7.8	%	11.7	%



Fiscal Years Ending	Fiscal 2017		Fiscal 2018-2019		Fiscal 2020-2021		Fiscal 2022 and Thereafter		Total
Operating leases	$	220.7	$	438.5	$	420.0	$	746.7	$	1,825.9
Inventory Purchase Obligations	549.0		—		—		—		549.0
Other commitments	45.4		3.8		—		—		49.2
Long-term debt	—		0.1		1.2		1.0		2.3
Total	$	815.1	$	442.4	$	421.2	$	747.7	$	2,426.4



	January 1, 2016
Inventory	$	3.0
Fixed assets	2.1
Customer relationship intangible assets	2.2
Fair value of assets acquired	7.3
Less: consideration paid	3.6
Gain on acquisition of MK Korea	$	3.7



	June 28, 2015
Current assets	$	25.9
Fixed assets	6.4
Customer relationship intangible assets	2.0
Goodwill	9.2
Debt obligations	(9.5		)
Other liabilities	(2.3		)
Total fair value of net assets of MK Panama	31.7
Fair value of preexisting interest in MK Panama	8.1
Non-controlling interest	5.1
Fair value of consideration provided	$	18.5



	April 2, 2016			March 28, 2015
Trade receivables:
Credit risk assumed by insured/factors	$	353.7		$	374.1
Credit risk retained by Company	61.8			67.5
Receivables due from licensees	9.5			11.8
	425.0			453.4
Less allowances:	(117.1		)	(90.0		)
	$	307.9		$	363.4



Fiscal 2017	$	8.7
Fiscal 2018	8.7
Fiscal 2019	8.6
Fiscal 2020	8.6
Fiscal 2021	8.4
Thereafter	24.4
	$	67.4



	April 2, 2016
4.75% loan, due April 6, 2020 from Banco General de Panama	$	1.2
5.0% loan (see Note 19)	1.0
Other	0.1
Total long-term debt	$	2.3



Fiscal years ending:
2017	$	220.7
2018	223.4
2019	215.1
2020	213.1
2021	206.9
Thereafter	746.7
	$	1,825.9


	Fair value at March 28, 2020, using:										Fair value at March 30, 2019, using:
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative assets:
Forward foreign currency exchange contracts	$	—	$	1	$	—	$	—	$	5	$	—
Net investment hedges	—		3		—		—		37		—

Total derivative assets	$	—	$	4	$	—	$	—	$	42	$	—

Derivative liabilities:

Other undesignated derivative contracts	$	—	$	—	$	—	$	—	$	5	$	—



	Fair value at April 2, 2016, using:							Fair value at March 28, 2015, using:
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Foreign currency forward contracts:
Euro	$	—	$	(5.5	)	$	—	$	—	$	23.6		$	—
Canadian Dollar	—		—			—		—		1.4			—
U.S. Dollar	—		0.1			—		—		(0.6		)	—
Total	$	—	$	(5.4	)	$	—	$	—	$	24.4		$	—


	March 28, 2020						March 30, 2019
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
4.000% Senior Notes	$	446	$	443	$	445	$	438
Term Loan	$	1,010	$	957	$	1,570	$	1,574
Revolving Credit Facilities	$	720	$	720	$	550	$	550


	Carrying Value Prior to Impairment		Fair Value		Impairment Charge
Fiscal 2020:
Operating Lease Right-of-Use Assets	$	717	$	437	$	280
Trade Name	547		367		180
Goodwill	474		303		171
Property and Equipment	105		28		77
Total	$	1,843	$	1,135	$	708

Fiscal 2019:
Property and Equipment	$	26	$	7	$	19
Lease Rights	3		1		2

Total	$	29	$	8	$	21

Fiscal 2018:
Property and Equipment	$	31	$	3	$	28
Lease Rights	5		1		4
Customer relationships	1		—		1
Total	$	37	$	4	$	33


					Fair Values
	Notional Amounts							Assets							Liabilities ⁽²⁾
	March 28, 2020		March 30, 2019		March 28, 2020			March 30, 2019			March 28, 2020		March 30, 2019
Designated forward foreign currency exchange contracts	$	161	$	166	$	1	⁽¹⁾	$	5	⁽¹⁾	$	—	$	—
Designated net investment hedge	44		2,234		3		⁽³⁾	37		⁽³⁾	—		—
Total designated hedges	205		2,400		4			42			—		—
Undesignated derivative contracts ⁽⁴⁾	—		199		—			—			—		5
Total	$	205	$	2,599	$	4		$	42		$	—	$	5



					Fair Values
	Notional Amounts				Current Assets ⁽¹⁾				Current Liabilities ⁽²⁾
	April 2, 2016		March 28, 2015		April 2, 2016		March 28, 2015		April 2, 2016		March 28, 2015
Designated forward currency exchange contracts	$	174.1	$	226.1	$	0.1	$	23.6	$	5.1	$	0.5
Undesignated forward currency exchange contracts	30.0		25.8		—		1.4		0.4		0.1
Total	$	204.1	$	251.9	$	0.1	$	25.0	$	5.5	$	0.6


⁽²⁾	~~Recorded within accrued expenses and other current liabilities in the Company’s audited consolidated balance sheets.~~



	Fiscal Year Ended April 2, 2016					Fiscal Year Ended March 28, 2015				Fiscal Year Ended March 29, 2014
	Pre-Tax Loss Recognized in OCI			Pre-tax Gain Reclassified from Accumulated OCI into Earnings		Pre-Tax Gain Recognized in OCI		Pre-tax Gain Reclassified from Accumulated OCI into Earnings		Pre-Tax Loss Recognized in OCI			Pre-tax Loss Reclassified from Accumulated OCI into Earnings
Designated hedges	$	(25.2	)	$	10.9	$	36.6	$	2.1	$	(3.8	)	$	(0.5	)


	Fiscal Year Ended
	Pre-Tax Losses (Gains) Reclassified from Accumulated OCI							Location of Losses (Gains) Recognized							Total Cost of Sales
	March 28, 2020		March 30, 2019		March 31, 2018						March 28, 2020			March 30, 2019			March 31, 2018
Designated forward currency exchange contracts	$	(10)	$	4	$	4	Cost of Sales		$	2,280		$	2,058		$	1,860


	Foreign Currency Translation (Losses) Gains ⁽¹⁾		Net Gains (Losses) on Derivatives ⁽²⁾		Other Comprehensive (Loss)/Gain Attributable to Capri
Balance at April 1, 2017	$	(87)	$	6	$	(81)
Other comprehensive income (loss) before reclassifications	148		(19)		129
Less: amounts reclassified from AOCI to earnings	—		(3)		(3)
Other comprehensive income (loss), net of tax	148		(16)		132
Balance at March 31, 2018	61		(10)		51
Other comprehensive (loss) income before reclassifications	(134)		14		(120)
Less: amounts reclassified from AOCI to earnings	—		(3)		(3)
Other comprehensive (loss) income, net of tax	(134)		17		(117)
Balance at March 30, 2019	(73)		7		(66)
Other comprehensive income before reclassifications	145		5		150
Less: amounts reclassified from AOCI to earnings	—		9		9
Other comprehensive income (loss), net of tax	145		(4)		141
Balance at March 28, 2020	$	72	$	3	$	75



	Foreign Currency Translation Losses			Net Gains (Losses) on Derivatives				Total Accumulated Other Comprehensive Income (Loss)
Balance at March 30, 2013	$	(4.8	)	$	1.3		⁽¹⁾	$	(3.5	)
Other comprehensive loss before reclassifications	—			(3.4		)	⁽²⁾	(3.4		)
Less: amounts reclassified from AOCI to earnings	—			(0.5		)		(0.5		)
Other comprehensive loss net of tax	—			(2.9		)	⁽¹⁾	(2.9		)
Balance at March 29, 2014	(4.8		)	(1.6		)		(6.4		)
Other comprehensive (loss) income before reclassifications	(91.3		)	32.8			⁽¹⁾	(58.5		)
Less: amounts reclassified from AOCI to earnings	—			1.9			⁽²⁾	1.9
Other comprehensive (loss) income net of tax	(91.3		)	30.9				(60.4		)
Balance at March 28, 2015	(96.1		)	29.3			⁽¹⁾	(66.8		)
Other comprehensive income (loss) before reclassifications	18.5			(22.6		)	⁽¹⁾	(4.1		)
Less: amounts reclassified from AOCI to earnings	—			9.9			⁽²⁾	9.9
Other comprehensive income (loss) net of tax	18.5			(32.5		)		(14.0		)
Balance at April 2, 2016	$	(77.6	)	$	(3.2	)	⁽¹⁾	$	(80.8	)
Less: other comprehensive income attributable to noncontrolling interest	$	0.1		$	—			$	0.1
Other comprehensive loss attributable to MKHL	$	(77.7	)	$	(3.2	)		$	(80.9	)


⁽²⁾	Reclassified amounts relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations. The amount reclassified from other comprehensive income for Fiscal 2016 is net of a tax provision of $1.0 million. The tax effects related to prior period amounts were not material.