Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 01, 2020 | Dec. 08, 2020 | Feb. 01, 2020 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Aug. 1, 2020 | ||
Entity File Number | 001-39300 | ||
Entity Registrant Name | ASCENA RETAIL GROUP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 30-0641353 | ||
Entity Address, Address Line One | 933 MacArthur Boulevard | ||
Entity Address, Postal Zip Code | 07430 | ||
City Area Code | 551 | ||
Local Phone Number | 777-6700 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 39 | ||
Entity Common Stock, Shares Outstanding | 10,090,162 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001498301 | ||
Current Fiscal Year End Date | --08-01 | ||
Entity Address, City or Town | Mahwah, | ||
Entity Address, State or Province | NJ |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Aug. 01, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently issued accounting standards | Recently Issued Accounting Standards Recently adopted standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases” (“ASC 842”). The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company adopted this ASU as of August 4, 2019 by applying the modified respective approach, with the cumulative effect recognized at adoption. As a result of this standard, the Company recognized approximately $875.9 million of right-of-use assets and approximately $1,072.0 million of lease liabilities (current and long-term combined), on its consolidated balance sheet as of August 4, 2019. The right-of-use lease liability for operating leases is based on the net present value of future minimum lease payments. The right-of-use asset for operating leases is based on the lease liability adjusted for the reclassification of certain balance sheet amounts such as favorable leases, straight-line rent liability, purchased lease rights and landlord allowances and a cumulative effect adjustment that decreased opening Accumulated deficit by approximately $11.5 million for transition impairments related to previously impaired leased locations. As a result, prior periods have not been restated. The Company determines if an arrangement is a lease at inception and on the lease commencement date, the Company recognizes an asset for the right to use a leased asset and a liability based on the present value of remaining lease payments over the lease term. As the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on a third-party analysis, which is updated periodically. That analysis concluded that the Company’s incremental borrowing rate upon adoption ranged from 24-30%, depending on the term. For leases existing before the adoption of the new lease accounting standard, the Company used its incremental borrowing rate as of the date of adoption, determined using the remaining lease term as of the date of adoption. For leases commencing on or after the adoption of the new lease accounting standard, the incremental borrowing rate is determined using the remaining lease term as of the lease commencement date. The Company elected the package of practical expedients included in this guidance, which allows us (i) to not reassess whether any expired or existing contracts contain leases; (ii) to not reassess the lease classification for any expired or existing leases; (iii) to account for a lease and non-lease component as a single component for both its real estate and non-real estate leases; and (iv) to not reassess the initial direct costs for existing leases. The measurement of lease right-of-use assets and liabilities includes amounts related to: • Lease payments made prior to the lease commencement date; • Incentives from landlords received by the Company for signing a lease, including construction allowances or deferred lease credits paid to the Company by landlords towards construction and tenant improvement costs, which are presented as a reduction to the right-of-use asset recorded; • Fixed payments related to lease components, such as rent escalation payments scheduled at the lease commencement date; and • Fixed payments related to nonlease components, such as taxes, insurance, and maintenance costs. The measurement of lease right-of-use assets and liabilities excludes amounts related to: • Variable payments related to lease components, such as contingent rent payments made by the Company based on performance, the expense of which is recognized in the period incurred in the consolidated statements of operations; • Variable payments related to nonlease components, such as taxes, insurance, and maintenance costs, the expense of which is recognized in the period incurred in the consolidated statements of operations; and • Leases with an initial term of 12 months or less, the expense of which is recognized in the period incurred in the consolidated statements of operations. Certain of the Company’s leases include options to extend the lease or to terminate the lease. The Company assesses these leases and, depending on the facts and circumstances, may or may not include these options in the measurement of the Company’s lease right-of-use assets and liabilities. Generally, the Company’s options to extend its leases are at the Company’s sole discretion and at the time of lease commencement are not reasonably certain of being exercised. There may be instances in which a lease is being renewed on a month-to-month basis and, in these instances, the Company will recognize lease expense in the period incurred in the consolidated statements of operations until a new agreement has been executed. Amortization and interest expense related to lease right-of-use assets and liabilities are generally calculated on a straight-line basis over the lease term. Amortization and interest expense related to previously impaired lease right-of-use assets are calculated on a front-loaded amortization pattern resulting in higher single lease expense in earlier periods. Depending on the nature of the lease, amortization and interest expense is recorded in either Buying, distribution, and occupancy expense or in Selling, general and administrative expense in the consolidated statements of operations. The Company’s lease right-of-use assets are assessed for indicators of impairment at least quarterly. The results of any such impairments are disclosed in Note 16. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, the Company does not have any finance leases, any material sublease arrangements or any material leases where the Company is considered the lessor. The following table provides the impact of adoption of ASU 2016-02 on the Company’s consolidated balance sheet: August 3, 2019 (as reported under ASC 840) Impact of adoption of ASC 842 August 3, 2019 (as reported under ASC 842) (millions) Assets Prepaid expenses and other current assets $ 242.3 $ (33.6) $ 208.7 Current assets related to discontinued operations 98.2 (7.6) 90.6 Other intangible assets, net 276.6 (8.4) 268.2 Operating lease right-of-use asset — 744.4 744.4 Non-current assets related to discontinued operations 11.5 131.5 143.0 Liabilities and Shareholders’ Equity Current portion of lease liabilities — 141.3 141.3 Current liabilities related to discontinued operations 94.7 37.8 132.5 Lease-related liabilities 204.6 (204.6) — Long-term lease liabilities — 769.1 769.1 Non-current liabilities related to discontinued operations 35.5 94.2 129.7 Accumulated deficit (935.9) (11.5) (947.4) Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The new standard simplifies the accounting for income taxes by removing exceptions: • to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income); • to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; • to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and • to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, the standard does not require that an entity allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, however, an entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority. The standard does require that an entity: • recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; • evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; and • reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. ASU 2019-12 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company has elected to early adopt ASU 2019-12. By early adopting, ASU 2019-12 becomes effective as of the beginning of Fiscal 2020, however, there is no cumulative effect to be recognized with the early adoption. As a result of the ASU 2019-12 adoption, the Company did not recognize income tax expense on the income from discontinued operations related to Dressbarn for the year ended August 1, 2020. Recently issued standards Intangible Assets In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods. Early adoption is permitted for annual or interim periods. This ASU requires that implementation costs incurred in a hosting arrangement that is a service contract be assessed in accordance with the existing guidance in Subtopic 350-40, “Internal-Use Software.” Accordingly, costs incurred during the preliminary project stage must be expensed as incurred, while costs incurred during the application development stage must be capitalized. Capitalized implementation costs associated with a hosting arrangement that is a service contract must be expensed over the term of the hosting arrangement. Additionally, the new guidance requires that the expense of these capitalized costs be presented in the same line item in the statement of income as the fees associated with the hosting element of the arrangement. While the Company is in the process of determining the impact of the adoption of this guidance on its consolidated financial statements, the Company does not anticipate that the guidance will have a significant impact on its consolidated financial statements upon adoption of the new standard in Fiscal 2021. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 03, 2019 | |
Current assets: | |||
Cash and cash equivalents | $ 580.4 | $ 323.8 | |
Inventories | 338.2 | 490.7 | |
Prepaid expenses and other current assets | 169.1 | 242.3 | |
Current assets related to discontinued operations | 3.5 | 98.2 | |
Total current assets | 1,091.2 | 1,155 | |
Property and equipment, net | 466.3 | 835.5 | |
Operating lease right-of-use assets | 378.4 | 0 | |
Goodwill | 164.6 | 313.5 | |
Other intangible assets, net | 134.2 | 276.6 | |
Equity method investment | 45.2 | 42.1 | |
Other assets | 54.2 | 65.6 | |
Non-current assets related to discontinued operations | 0 | 11.5 | |
Total assets | 2,334.1 | 2,699.8 | |
Current liabilities: | |||
Accounts payable | 161 | 316.1 | |
Accrued expenses and other current liabilities | 70.1 | 273.3 | |
Deferred income | 116.9 | 114.1 | |
Current portion of lease liabilities | 0.6 | 0 | |
Current liabilities related to discontinued operations | 23.5 | 94.7 | |
Total current liabilities | 600 | 798.2 | |
Liabilities subject to compromise | 2,679.4 | 0 | |
Long-term debt | [1] | 0 | 1,338.6 |
Lease-related liabilities | 0 | 204.6 | |
Operating Lease, Liability, Noncurrent | 0.8 | 0 | |
Other non-current liabilities | 42.2 | 171.9 | |
Non-current liabilities related to discontinued operations | 5.9 | 35.5 | |
Total liabilities | 3,328.3 | 2,548.8 | |
Commitments and contingencies (Note 18) | |||
Common stock, outstanding (shares) | 10,087,000 | 9,925,000 | |
Common stock, issued (shares) | 10,087,000 | 9,925,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Shareholders' (deficit) equity: | |||
Common stock, par value $0.01 per share; 10,087 and 9,925 shares issued and outstanding | $ 0.1 | $ 0.1 | |
Additional paid-in capital | 1,106.9 | 1,102.5 | |
Accumulated deficit | (2,089.2) | (935.9) | |
Accumulated other comprehensive loss | (12) | (15.7) | |
Total shareholders'(deficit) equity | (994.2) | 151 | |
Total liabilities and shareholders' (deficit) equity | $ 2,334.1 | $ 2,699.8 | |
[1] | (c) See Note 2 for additional information. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 01, 2020 | Dec. 19, 2019 | Dec. 18, 2019 | Aug. 03, 2019 |
Statement of Financial Position [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Common stock, outstanding (shares) | 10,087,000 | 9,972,221 | 199,444,436 | 9,925,000 |
Common stock, issued (shares) | 10,087,000 | 9,925,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | ||
Income Statement [Abstract] | |||
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation | $ (4) | ||
Discontinued Operation, Tax Effect of Income (Loss) from Discontinued Operation During Phase-out Period | (31.2) | ||
Net sales | $ 3,718.1 | 4,734.7 | |
Cost of goods sold | (1,836.2) | (2,088) | |
Gross margin | 1,881.9 | 2,646.7 | |
Other operating expenses: | |||
Buying, distribution and occupancy expenses | (825.8) | (953.8) | |
Selling, general and administrative expenses | (1,421.1) | (1,545.8) | |
Restructuring and other related charges | [1] | (238.3) | (94.1) |
Impairment of goodwill | [1] | (148.9) | (276) |
Impairment of other intangible assets | [1] | (128.7) | (134.9) |
Depreciation and amortization expense | [2] | (232.7) | (280.4) |
Total other operating expenses | (2,995.5) | (3,285) | |
Operating loss | [1] | (1,113.6) | (638.3) |
Interest expense | (99.4) | (107) | |
Interest and other (expense) income, net | (7.6) | 3.8 | |
Gain on extinguishment of debt | 28.5 | 0 | |
Reorganization Items | (3.4) | 0 | |
Loss from continuing operations before (provision) benefit for income taxes and income (loss) from equity method investment | (1,195.5) | (741.5) | |
(Provision) benefit for income taxes from continuing operations | 13.7 | (23.9) | |
Income (loss) from equity method investment | 3.1 | (11.8) | |
Loss from continuing operations | (1,206.1) | (729.4) | |
Discontinued operations [Abstract] | |||
Income from discontinued operations, net of taxes | [3] | 64.3 | 23.5 |
Gain on on Disposal of Discontinued Operation, Net of Tax | [4] | 0 | 44.5 |
Net loss | $ (1,141.8) | $ (661.4) | |
Net loss per common share - basic: | |||
Continuing operations (in dollars per share) | $ (120.68) | $ (73.87) | |
Discontinued operations (in dollars per share) | 6.43 | 6.89 | |
Total net loss per basic common share (in dollars per share) | (114.25) | (66.98) | |
Net loss per common share - diluted | |||
Continuing operations (in dollars per share) | (120.68) | (73.87) | |
Discontinued Operations (in dollars per share) | 6.43 | 6.89 | |
Total net loss per diluted common share (in dollars per share) | $ (114.25) | $ (66.98) | |
Weighted average common shares outstanding: | |||
Basic (in shares) | 9,994 | 9,874 | |
Diluted (in shares) | 9,994 | 9,874 | |
[1] | (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. | ||
[2] | a) Depreciation and amortization expense and capital expenditures related to the maurices and Dressbarn businesses, historically reported within the Value Fashion segment, were excluded from the tables and is classified as discontinued operations within the consolidated financial statements. Refer to Note 3. | ||
[3] | Income from discontinued operations is presented net of income tax expense of $0.2 million and $31.2 million for the fiscal years ended August 1, 2020, and August 3, 2019, respectively. | ||
[4] | Gain on sale of discontinued operations is presented net of income tax benefit of $4.0 million for the fiscal year ended August 3, 2019. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (1,141.8) | $ (661.4) |
Other comprehensive (loss) income, net of tax: | ||
Reclassification of interest rate hedge deferred loss into earnings | 11.3 | 0 |
Deferred loss related to interest rate hedge | (5) | (5) |
Foreign currency translation adjustment | (2.6) | (0.5) |
Total other Comprehensive (loss) income before reclassification | 3.7 | (5.5) |
Reclassification adjustment for realized gain from foreign currency translation upon disposition of maurices | 0 | (2.7) |
Total comprehensive loss | $ (1,138.1) | $ (664.2) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions | 12 Months Ended | |||
Aug. 01, 2020USD ($) | Aug. 03, 2019USD ($) | |||
Cash flows from operating activities: | ||||
Net loss | $ (1,141.8) | $ (661.4) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization expense | 243.6 | 321.1 | ||
Deferred income tax provision (benefit) | 12.4 | (10) | ||
Deferred rent and other costs recognized under prior lease accounting standard | 0 | (35.7) | ||
Stock-based compensation expense | 4.3 | 11.5 | ||
Impairment of goodwill | (148.9) | (276) | ||
Impairment of other intangible assets | (128.7) | [1] | (134.9) | [1] |
Impairment and write-down of tangible assets | 399 | 103.3 | ||
(Income) loss from equity method investment | (3.1) | 11.8 | ||
Non-cash interest expense | 10.2 | 9.9 | ||
Gain on extinguishment of debt | 28.5 | 0 | ||
Gain on sale of property and equipment | 0 | (0.3) | ||
Gain (Loss) on Disposition of Intangible Assets | (5) | 0 | ||
Gain on sale of maurices | 0 | (44.5) | ||
Other non-cash income, net | (10.1) | (3.1) | ||
Changes in operating assets and liabilities: | ||||
Inventories | 209.5 | (11.9) | ||
Accounts payable, accrued liabilities and income taxes payable | 121 | (93.1) | ||
Deferred income | 6.7 | 11.9 | ||
Lease-related liabilities | 0 | 11.7 | ||
Operating lease right-of-use assets and lease liabilities | (19.5) | 0 | ||
Other balance sheet changes, net | 55.3 | (11) | ||
Cash flows provided by operating activities | 131.6 | 21.1 | ||
Cash flows from investing activities: | ||||
Capital expenditures | (65.1) | (136.5) | ||
Proceeds from the sale of assets | 20.6 | 1 | ||
Proceeds from the sale of intangible assets | 5 | 0 | ||
Proceeds from the sale of maurices, net | 0 | 203.2 | ||
Cash flows provided by (used in) investing activities | (39.5) | 67.7 | ||
Cash flows from financing activities: | ||||
Redemptions and repayments of term loan | (69.8) | 0 | ||
Proceeds from revolver borrowings | 230 | 28.1 | ||
Repayments of revolver borrowings | 0 | (28.1) | ||
Proceeds from stock options exercised and employee stock purchases | 0.1 | 0.9 | ||
Tax payments related to share-based awards | 0 | (0.6) | ||
Cash flows provided by (used in) financing activities | 160.3 | 0.3 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | 252.4 | 89.1 | ||
Cash, cash equivalents and restricted cash at beginning of year | 329.2 | 240.1 | ||
Cash, cash equivalents and restricted cash at end of year | $ 581.6 | $ 329.2 | ||
[1] | (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period Of Adoption, Adjustment [Member] | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period Of Adoption, Adjustment [Member] | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Aug. 04, 2018 | 9,817,000,000 | ||||||
Beginning balance at Aug. 04, 2018 | $ 798.5 | $ 0.1 | $ 1,090.1 | $ (278.8) | $ (12.9) | ||
Beginning balance (Accounting Standards Update 2014-09) at Aug. 04, 2018 | $ 4.9 | $ 4.9 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (661.4) | (661.4) | |||||
Total other comprehensive income (loss) | (2.8) | (2.8) | |||||
Shares issued and equity grants made pursuant to stock-based compensation plans (shares) | 108,000,000 | ||||||
Shares issued and equity grants made pursuant to stock-based compensation plans | $ 11.8 | 12.4 | (0.6) | ||||
Ending balance (in shares) at Aug. 03, 2019 | 9,925,000 | 9,925,000,000 | |||||
Ending balance at Aug. 03, 2019 | $ 151 | $ 0.1 | 1,102.5 | (935.9) | (15.7) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (1,141.8) | ||||||
Total other comprehensive income (loss) | 3.7 | 3.7 | |||||
Shares issued and equity grants made pursuant to stock-based compensation plans (shares) | 162,000,000 | ||||||
Shares issued and equity grants made pursuant to stock-based compensation plans | $ 4.4 | 4.4 | 0 | ||||
Ending balance (in shares) at Aug. 01, 2020 | 10,087,000 | 10,087,000,000 | |||||
Ending balance at Aug. 01, 2020 | $ (994.2) | $ 0.1 | $ 1,106.9 | $ (2,089.2) | $ (12) | ||
Ending balance (Accounting Standards Update 2016-02 [Member]) at Aug. 01, 2020 | $ (11.5) | $ (11.5) |
Description of Business
Description of Business | 12 Months Ended |
Aug. 01, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Ascena Retail Group, Inc., a Delaware corporation, is a national specialty retailer of apparel for women and tween girls. The Company's continuing operations consist of its direct channel operations and approximately 2,500 stores throughout the United States, Canada and Puerto Rico. The Company had annual revenues for the fiscal year ended August 1, 2020 of approximately $3.7 billion. The Company and its subsidiaries are collectively referred to herein as the “Company,” “ascena,” “we,” “us,” “our” and “ourselves,” unless the context indicates otherwise. The Company operates its business in three reportable segments: Premium Fashion , Plus Fashion , and Kids Fashion . All of our segments sell fashion merchandise to the women's and girls' apparel market across a wide range of ages, sizes and demographics. Our segments consist of specialty retail, outlet and direct channel as well as licensed franchises in international territories at our Kids Fashion segment. Our Premium Fashion segment consists of our Ann Taylor and LOFT brands; our Plus Fashion segment consists of our Lane Bryant and Catherines brands; our Kids Fashion segment consists of our Justice brand. As further discussed in Note 3, at the beginning of the fourth quarter of Fiscal 2019, the Company announced the wind down of Dressbarn, which was completed in the second quarter of Fiscal 2020 and was formerly included in the Value Fashion segment. The Company's brands included in the continuing operations had the following store counts as of August 1, 2020: Justice 747 stores; Lane Bryant 637 stores; LOFT 619 stores; Catherines 255 stores; and Ann Taylor 275 stores. Liquidity The consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. As discussed in Note 12, the Company has significant indebtedness, primarily consisting of its Term Loan, borrowings under the Amended Revolving Credit Agreement (both of which are defined in Note 12), as well as obligations related to its retail store leases. As a result of the Company’s significant indebtedness, and the negative impacts sustained due to the worldwide COVID-19 pandemic, defined and discussed below, on July 23, 2020, the Company and certain of the Company’s direct and indirect subsidiaries commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia (the “Bankruptcy Court”). For more information, refer to Note 2. As discussed in Note 2, th e filing of the Chapter 11 Cases constitutes an event of default under the Company’s Term Loan and Amended Revolving Credit Agreement, resulting in the automatic and immediate acceleration of the outstanding obligations thereunder. The Company projects that it will not have sufficient cash on hand or available liquidity to repay such debt. These conditions and events raise substantial doubt as to the Company’s ability to continue as a going concern. While operating as a debtor-in-possession pursuant to the Bankruptcy Code, we may sell, or otherwise dispose of or liquidate, assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in the accompanying consolidated financial statements. Further, a Chapter 11 plan of reorganization is likely to materially change the amounts and classifications of assets and liabilities reported in our Consolidated Balance Sheet as of August 1, 2020. The consolidated financial statements do not reflect any adjustments that might result from the outcome of the Chapter 11 Cases, which are subject to a high degree of uncertainty and are dependent upon factors that are outside of the Company’s control, including actions of the Bankruptcy Court and the Company’s creditors. There can be no assurance that the Company will confirm and consummate a plan of reorganization with respect to the Chapter 11 Cases. Our ability to continue as a going concern is dependent upon, among other things, our ability to become profitable, maintain profitability and successfully implement our Chapter 11 plan of reorganization and/or any sale of our assets pursuant to Section 363 of the Bankruptcy Code. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. COVID-19 In March 2020, the World Health Organization declared the coronavirus disease ("COVID-19") a global pandemic and recommended containment and mitigation measures worldwide. To date, COVID-19 has surfaced in nearly all regions around the world and resulted in restrictions and shutdowns implemented by national, state, and local authorities. In response to COVID-19, the Company took a number of steps, some of which included a temporary shutdown of our retail stores and numerous actions in an effort to enhance liquidity and financial flexibility. COVID-19 has had a number of significant impacts on our financial statements, which are discussed in more detail in the Notes to these consolidated financial statements as follows: • The shutdown of our retail stores resulted in a significant reduction in Net sales in the second half of Fiscal 2020. As a result of the Net sales reduction and lower cash flows, the Company was required to revisit long-term cash flow assumptions and recorded impairments of goodwill, tangible and intangible assets in the third and fourth quarters of Fiscal 2020. Such impairments are further described in Notes 7, 8 and 10; • Steps to enhance liquidity and financial flexibility included the draw-down of $230 million on our revolving credit facility, which is further discussed in Note 12; • On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law in the United States. The CARES Act is discussed in Note 17; • Beginning in April 2020, we suspended rent payments under the leases for our temporarily closed retail stores. The impact of recent guidance issued by the Financial Accounting Standards Board's ("FASB") is discussed in Note 6; and • The store closures resulted in unsold seasonal inventory which required the company to record significant inventory reserves, which are discussed in Note 9. |
Voluntary Reorganization
Voluntary Reorganization | 12 Months Ended |
Aug. 01, 2020 | |
Voluntary Reorganization [Abstract] | |
Voluntary Reorganization Under Chapter 11 | Voluntary Reorganization Under Chapter 11 Filing Under Chapter 11 of the United States Bankruptcy Code Chapter 11 Cases and Effect of Automatic Stay On July 23, 2020 (the “Petition Date”), the Company and certain of the Company’s direct and indirect subsidiaries (collectively with the Company, the “Debtors”) commenced the Chapter 11 Cases, which are being jointly administered under the caption In re Ascena Retail Group, Inc., et al ., Case No. 20-33113. The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Debtors have filed with the Bankruptcy Court motions seeking, and the Bankruptcy Court has entered, a variety of “first day” motions seeking approval from the Bankruptcy Code for various forms of customary relief to allow the Company to meet necessary obligations and fulfill its duties during the restructuring process, including authority to continue payment of employee wages and benefits, honor certain customer and vendor commitments and otherwise manage its day-to-day operations in the ordinary course. In addition, the Debtors have received authority to use cash collateral of the lenders under the Amended Revolving Credit Agreement on an interim basis. The commencement of the Chapter 11 Cases on the Petition Date constituted an event of default that accelerated the Debtors’ obligations under the Term Loan and Amended Revolving Credit Agreement (the “Debt Instruments”), each of which provide that as a result of the Chapter 11 Cases, the principal then outstanding, together with accrued interest thereon and all fees and other obligations accrued thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Term Loan or the Amended Revolving Credit Agreement are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect thereof are subject to the applicable provisions of the Bankruptcy Code. As a result, the Company’s obligations under the Term loan have been classified as Liabilities subject to compromise in the consolidated balance sheet as of August 1, 2020. The Amended Revolving Credit Agreement is a secured obligation and classified as Current portion of long-term debt in the accompanying consolidated balance sheet as of August 1, 2020. Restructuring Support Agreement The Debtors have filed the Chapter 11 Cases to implement the terms of a Restructuring Support Agreement, dated July 23, 2020 (together with all exhibits and schedules thereto, the “RSA”), which was entered into prior to the commencement of the Chapter 11 Cases by the Company and certain of its subsidiaries (each, a “Company Party” and collectively, the “Company Parties”) and members of an ad hoc group of lenders (the “Consenting Stakeholders”) under the Term Loan. The RSA is supported by Consenting Stakeholders holding approximately 68% of the Term Loan as of the Petition Date. The RSA contemplates a restructuring process, to be implemented through voluntary cases under chapter 11 of the Bankruptcy Code, that is expected to significantly reduce the Debtors’ debt. Specifically, the RSA provided: • the substantial equitization of the Term Loan; • a fully backstopped capital injection of $150 million in new money financing pursuant to a backstop commitment letter (together with all exhibits and schedules thereto and as amended on September 9, 2020, the “Backstop Commitment Letter”) on the terms described in more detail below; • each Consenting Stakeholder will receive (i) its pro rata share (based on such party’s holdings of loans under the First Out Exit Term Facility (as defined in the RSA)) of 44.9% of the equity in reorganized Ascena and (ii) its pro rata share (based on such party’s Backstop Percentage (as defined in the RSA)) of an amount of equity in reorganized Ascena equal to $7.5 million (the “Backstop Equity Premium”), in each case subject to dilution from the Management Incentive Plan (as defined in the RSA); • all lenders under the Term Loan will receive their pro rata share of 55.1% of the equity in reorganized Ascena less the percentage of such equity distributed as the Backstop Equity Premium, subject to dilution from the Management Incentive Plan, and $88.2 million in new loans under the Last Out Exit Term Facility (as defined in the RSA); • holders of general unsecured claims will receive their pro rata share of $500,000, provided that holders of general unsecured claims vote as a class to accept the Debtors’ Chapter 11 plan; and • existing common equity in the Company will be canceled. In connection with the Company’s entry into the Sycamore APA (as defined and described in Note 24), on November 26, 2020, the Company Parties and the Consenting Stakeholders entered into the Second Amended Restructuring Support Agreement (the “Amended RSA”). In addition to providing for the Consenting Stakeholders’ support of the Sycamore Sale (as defined and described in Note 24), the Amended RSA provides, among other things, that each Consenting Stakeholder and each lender party to the Term Loan will receive its pro rata share (based on its term loan holdings under the Term Loan) of cash pursuant to distributions in accordance with the schedule set forth in Section 6.01(p) of the Amended RSA (instead of equity in reorganized Ascena as previously contemplated in the RSA). The Amended RSA does not contemplate material changes to the treatment of any other stakeholders’ claims, including holders of general unsecured claims, and in particular, the Amended RSA continues to provide that the existing common equity in the Company be canceled. The Amended RSA may be terminated by the Consenting Stakeholders upon the occurrence of certain events set forth therein, including the Bankruptcy Court not having confirmed the Debtors’ Chapter 11 plan by February 25, 2021 (rather than the date that is 110 days after the Petition Date as was provided in the RSA) and the Plan Effective Date not having occurred by March 11, 2021 (rather than the date that is 130 days after the Petition Date as was provided in the RSA). A Company Party may also terminate the RSA upon the occurrence of certain events set forth therein, including in the event the board of directors, board of managers or such similar governing body of any Company Party determines, after consulting with counsel, (i) that proceeding with any of the transactions described therein would be inconsistent with the exercise of its fiduciary duties or applicable law or (ii) in the exercise of its fiduciary duties, to pursue an Alternative Restructuring Proposal. Capitalized terms used but not otherwise defined in this paragraph have the meanings given to them in the Amended RSA. As a condition to the Consenting Stakeholders entering into the RSA, AnnTaylor Loft GP Lux S.à r.l. and AnnTaylor Loft Borrower Lux SCS, each of which are wholly owned indirect subsidiaries of the Company (the “LuxCos”), entered into a Conditional Assignment Agreement, dated July 23, 2020 (the “Conditional Assignment Agreement”), with Alter Domus (US) LLC, in its capacity as incremental collateral agent (the “Agent”) on behalf of the Consenting Stakeholders and each of the other secured parties under the Prepetition Term Credit Agreement. Pursuant to the Conditional Assignment Agreement, upon the occurrence of a “Trigger Event,” the LuxCos have agreed to irrevocably transfer to the Agent all of their respective personal property and other assets, including intellectual property, and trademark rights, and the Agent has agreed to grant Annco, Inc., an indirect subsidiary of the Company, a license to continue to use such trademark rights. A “Trigger Event” under the Conditional Assignment Agreement includes the occurrence of any of the following: (i) any Company Party or either of the LuxCos failing to perform or observe certain provisions set forth in the RSA, the Backstop Commitment Letter, the DIP Term Credit Agreement (as defined below) or the Conditional Assignment Agreement, which, in each case, is both adverse to the interests of the Consenting Stakeholders and remains uncured for ten business days after notice is provided to the Company Parties as set forth therein, (ii) a Consenting Stakeholder Termination Event (as defined in the RSA) and termination of the RSA in accordance with the terms thereof, (iii) an acceleration of the obligations arising under the DIP Term Credit Agreement in accordance with such agreement or (iv) a Change of Control (as defined in the Conditional Assignment Agreement). Although the Company Parties intend to pursue the restructuring contemplated by the Amended RSA, there can be no assurance that the Company Parties will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Amended RSA or at all. In particular, the transactions contemplated by the Amended RSA are subject to approval by the Bankruptcy Court, among other conditions. Debtors-in-Possession Financing On July 23, 2020, prior to commencement of the Chapter 11 Cases and as contemplated by the RSA, the Company entered into the Backstop Commitment Letter with certain of the Company’s creditors and/or their affiliates (the “Backstop Parties”), which was amended and restated on September 9, 2020, pursuant to which the Backstop Parties committed to provide the Company with a superpriority senior secured debtor-in-possession term loan credit facility in an aggregate amount equal to approximately $312.3 million (the “DIP Term Facility”), on the terms and conditions set forth therein, including the approval of the Bankruptcy Court. In addition, on August 14, 2020, the Company entered into a commitment letter (the “DIP ABL Commitment Letter”) with certain lenders (the “DIP ABL Lenders”) under the Amended Revolving Credit Agreement. Pursuant to the DIP ABL Commitment Letter, and on the terms and conditions set forth therein, including the approval of the Bankruptcy Court, the DIP ABL Lenders committed to provide the Company with a superpriority senior secured debtor-in-possession asset based revolving credit facility in an aggregate amount of up to $400 million (the “DIP ABL Facility” and, together with the DIP Term Facility, the “DIP Facilities”), pursuant to which the commitments and loans of the lenders party to the Amended Revolving Credit Agreement would convert into the DIP ABL Facility. In connection with the Chapter 11 Cases, the Debtors filed a motion for approval of the DIP Facilities, Docket No. 18, and on September 10, 2020, the Bankruptcy Court approved such motion and entered an order approving the DIP Facilities and use of cash collateral on a final basis, Docket No. 587 (collectively, the “DIP Order”). DIP Term Credit Agreement In accordance with the DIP Order, on September 16, 2020, the Company and AnnTaylor Retail, Inc., as borrowers (collectively, the “DIP Term Borrowers”), entered into a Senior Secured Super-Priority Debtor-in-Possession Term Credit Agreement (the “DIP Term Credit Agreement”) with the lenders party thereto (the “DIP Term Lenders”) and Alter Domus (US) LLC, as administrative agent. Capitalized terms used but not otherwise defined in this “DIP Term Credit Agreement” section of this Note 2 have the meanings given to them in the DIP Term Credit Agreement. The DIP Term Borrowers’ obligations under the DIP Credit Agreement are secured by substantially all of the real and personal property of the DIP Term Borrowers and each subsidiary of the Company that are guarantors (collectively, the “DIP Term Loan Parties”), subject to certain exceptions. The DIP Term Facility, which is governed by the DIP Term Credit Agreement, consists of (i) $150.0 million in new money term loans (the “New Money DIP Loans”) and (ii) $162.3 million of certain prepetition term loan obligations that have been rolled into the DIP Term Facility. The proceeds of the New Money DIP Loans may be used, among other things, to pay certain costs, fees and expenses related to the Chapter 11 Cases and to prepay or repay up to $50.0 million of borrowings under the ABL Credit Agreement, in all cases, subject to the terms of the DIP Term Credit Agreement. The maturity date of the DIP Term Facility is the date that is the earliest of (i) six months after the Effective Date, (ii) the date of the substantial consummation (as defined in section 1101(2) of the Bankruptcy Code) of an Acceptable Plan, (iii) the date the Bankruptcy Court converts any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, (iv) the date the Bankruptcy Court dismisses any of the Chapter 11 Cases, (v) the date on which the DIP Term Loan Parties consummate a sale of all or substantially all of the assets of the DIP Term Loan Parties pursuant to section 363 of the Bankruptcy Code or otherwise, and (vi) such earlier date on which the loans made under the DIP Term Credit Agreement become due and payable by acceleration or otherwise in accordance with the terms of the DIP Term Credit Agreement and the other Loan Documents. The DIP Term Facility is expected to be terminated in connection with the consummation of the Sycamore Sale. Loans under the DIP Term Facility bear interest at a rate per annum equal to (i) in the case of a base rate loan, the base rate (which is subject to a floor of 2.00%) plus 10.75% or (ii) in the case of a Eurodollar rate loan, the adjusted London interbank offering rate (which is subject to a floor of 1.00%) plus 11.75%. Upon the occurrence and during the continuance of an event of default under the DIP Term Facility, the Company will be subject to a default rate of interest equal to 2.00% above the rate otherwise applicable. The DIP Term Credit Agreement includes customary negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the DIP Term Borrowers’ and their restricted subsidiaries’ ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans, advances or guarantees, engage in mergers, consolidations, sales of assets and acquisitions and pay dividends and distributions, in each case subject to customary exceptions for debtor-in-possession loan agreements of this type. The DIP Term Credit Agreement also includes representations and warranties, mandatory prepayments, affirmative covenants and events of default customary for financings of this type. Certain bankruptcy-related events are also events of default, including, but not limited to, the dismissal by the Bankruptcy Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, the appointment of a trustee pursuant to chapter 11 of the Bankruptcy Code, and certain other events related to the impairment of the DIP Term Lenders’ rights or liens granted under the DIP Term Credit Agreement. DIP ABL Credit Agreement In accordance with the DIP Order, on September 16, 2020, the Company and certain of its subsidiaries, as borrowers (collectively, the “DIP ABL Borrowing Parties”), and certain other subsidiaries of the Company, as guarantors (together with the DIP ABL Borrowing Parties, the “DIP ABL Loan Parties”), entered into a Senior Secured Super-Priority Debtor-in-Possession Credit Agreement (the “DIP ABL Credit Agreement”) with the DIP ABL Lenders and JPMorgan Chase Bank, N.A., as administrative agent, which provides the Company with a superpriority senior secured debtor-in-possession asset based revolving credit facility of up to $400 million in the aggregate with a $200 million letter of credit sublimit. Capitalized terms used but not otherwise defined in this “DIP ABL Credit Agreement” section of this Note 2 have the meanings given to them in the DIP ABL Credit Agreement. The obligations under the DIP ABL Credit Agreement are secured by substantially all of the real and personal property of the DIP ABL Loan Parties, subject to certain exceptions. The proceeds of the DIP ABL Facility may be used to pay certain costs, fees and expenses related to the Chapter 11 Cases, to repay certain prepetition indebtedness and for working capital, among other things, in all cases subject to the terms of the DIP ABL Credit Agreement. The maturity date of the DIP ABL Facility is the date that is the earliest of (i) six months after the Effective Date, (ii) the date of the substantial consummation (as defined in section 1101(2) of the Bankruptcy Code) of an Acceptable Plan, (iii) the date the Bankruptcy Court converts any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, (iv) the date the Bankruptcy Court dismisses any of the Chapter 11 Cases, (v) the date on which the DIP ABL Loan Parties consummate a sale of all or substantially all of the assets of the DIP ABL Loan Parties pursuant to section 363 of the Bankruptcy Code or otherwise, and (vi) such earlier date on which the loans made under the DIP ABL Credit Agreement become due and payable by acceleration or otherwise in accordance with the terms of the DIP ABL Credit Agreement and the other Loan Documents. The DIP ABL Facility is expected to be determined in connection with the consummation of the Sycamore Sale. Loans under the DIP ABL Facility bear interest at a rate per annum equal to (i) in the case of a base rate loan, the base rate plus 1.50% or (ii) in the case of a Eurodollar rate loan, the adjusted London interbank offering rate (which is subject to a floor of 0.75%) plus 2.50%. If any principal of or interest on any loan or any fee or other amount payable under the DIP ABL Facility is not paid when due, such overdue amount will be subject to a default rate of interest equal to 2.00% above the rate otherwise applicable. The DIP ABL Credit Agreement includes customary negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the DIP ABL Borrowing Parties’ and their restricted subsidiaries’ ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans, advances or guarantees, engage in mergers, consolidations, sales of assets and acquisitions and pay dividends and distributions, in each case subject to customary exceptions for debtor-in-possession loan agreements of this type. The DIP ABL Credit Agreement also includes representations and warranties, mandatory prepayments, affirmative covenants and events of default customary for financings of this type. Certain bankruptcy-related events are also events of default, including, but not limited to, the dismissal by the Bankruptcy Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, the appointment of a trustee pursuant to chapter 11 of the Bankruptcy Code, and certain other events related to the impairment of the DIP ABL Lenders’ rights or liens granted under the DIP ABL Credit Agreement. Nasdaq Delisting On July 24, 2020, the Company received a letter from the Listing Qualifications Department staff of Nasdaq notifying the Company that, as a result of the Chapter 11 Cases and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, at the opening of business on August 4, 2020, trading of the Company’s common stock was suspended from Nasdaq and the Company’s common stock began trading on the OTC Pink Marketplace under the symbol “ASNAQ.” On August 11, 2020, Nasdaq filed a Form 25 with the Securities and Exchange Commission (the "SEC") to delist the Company’s common stock from Nasdaq. The deregistration of the common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), became effective 90 days after filing of the Form 25. The common stock remains registered under Section 12(g) of the Exchange Act. Liabilities Subject to Compromise Liabilities subject to compromise refers to prepetition obligations which may be affected by the Chapter 11 process. These amounts represent the Company's current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases. Differences between the liabilities the Company has estimated and the claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 Cases and adjust amounts as necessary. Such adjustments may be material. The components of liabilities subject to compromise are presented below: August 1, 2020 Liabilities subject to compromise: (millions) Accounts payable $ 417.0 Accrued expenses and other current liabilities 123.0 Current portion of long-term debt (a) 1,252.6 Current portion of lease liabilities 153.9 Lease-related liabilities 626.4 Other non-current liabilities 106.5 Liabilities subject to compromise $ 2,679.4 ____________ (a) See Note 12 for more details of the prepetition debt reported as Liabilities subject to compromise. Interest Expense The Company has ceased recording interest on the Term Loan, which is classified as Liabilities subject to compromise as of the Petition Date. The contractual interest expense on Liabilities subject to compromise not accrued or recorded in the Consolidated Statements of Operations was approximately $2.1 million, representing interest expense from the Petition Date of July 23, 2020 through August 1, 2020. Reorganization Items, Net The Company has incurred, and will continue to incur, significant costs associated with the Chapter 11 Cases. The amount of these costs, which are being expensed as incurred, are expected to significantly affect the Company's results. Reorganization items, net of $3.4 million represent the post-petition costs directly associated with the Chapter 11 Cases and for Fiscal 2020 primarily include professional fees which were substantially paid during the year ended August 1, 2020. Debtors-in-Possession Condensed Combined Financial Statements Condensed combined financial statements of the debtors-in-possession are set forth below. These condensed combined financial statements exclude the financial statements of certain non-debtor entities. Transactions and balances of receivables and payables between debtors-in-possession are eliminated in consolidation. However, the debtors-in-possession's condensed combined balance sheet includes receivables from related non-debtor entities and payables to related non-debtor entities. CONDENSED BALANCE SHEET August 1, 2020 (millions) ASSETS Current assets: Cash and cash equivalents $ 553.5 Inventories 342.6 Prepaid expenses, and other current assets 149.4 Current assets related to discontinued operations 3.5 Total current assets 1,049.0 Property and equipment, net 454.1 Operating lease right-of-use assets 377.0 Goodwill 164.6 Other intangible assets, net 20.2 Equity method investment 45.2 Other assets 52.2 Investment in non-debtor subsidiaries 177.3 Total assets $ 2,339.6 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 126.8 Accrued expenses and other current liabilities 63.7 Deferred income 116.9 Current portion of long-term debt 227.9 Current liabilities related to discontinued operations 23.5 Total current liabilities 558.8 Other non-current liabilities 34.3 Non-current liabilities related to discontinued operations 5.9 Amounts due to non-debtor subsidiaries 99.9 Liabilities subject to compromise 2,679.4 Total liabilities 3,378.3 Total equity shareholders' (deficit) equity (1,038.7) Total liabilities and shareholders' (deficit) equity $ 2,339.6 CONDENSED STATEMENT OF OPERATIONS Fiscal Year Ended August 1, 2020 (millions) Net sales $ 3,707.2 Cost of goods sold (1,883.0) Gross margin 1,824.2 Other operating expenses: Buying, distribution and occupancy expenses (814.3) Selling, general and administrative expenses (1,406.6) Restructuring and other related charges (234.3) Impairment of goodwill (148.9) Impairment of other intangible assets (93.2) Depreciation and amortization expenses (230.5) Equity in losses of non-debtor subsidiaries (28.8) Total other operating expenses (2,956.6) Operating loss (1,132.4) Interest expense (99.4) Interest and other income, net 4.5 Gain on extinguishment of debt 28.5 Reorganization items, net (3.4) Loss from continuing operations before provision for income taxes and income from equity method investment (1,202.2) Provision for income taxes from continuing operations (7.0) Income from equity method investment 3.1 Loss from continuing operations (1,206.1) Discontinued operations Income from discontinued operations, net of taxes 64.3 Net loss $ (1,141.8) CONDENSED STATEMENT OF CASH FLOWS Fiscal Year Ended August 1, 2020 (millions) Cash flows provided by operating activities $ 138.3 Cash flows from investing activities: Capital expenditures (65.1) Proceeds from sale of assets 20.6 Proceeds from the sale of intangible assets 5.0 Cash flows used in investing activities (39.5) Cash flows from financing activities: Redemptions and repayments of term loan (69.8) Proceeds from revolver borrowings 230.0 Proceeds from stock options exercised and employee stock purchases 0.1 Cash flows provided by financing activities 160.3 Increase in cash and cash equivalents 259.1 Cash and cash equivalents, beginning of period 295.6 Cash and cash equivalents, end of period $ 554.7 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Consolidation The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and present the financial position, operational results, comprehensive loss and cash flows of entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include: evaluation of goodwill and other intangible assets for impairment; the realizability of inventory; impairments of long-lived tangible assets and right-of-use assets; and the realizability of deferred tax assets. Fiscal Year Fiscal year 2020 ended on August 1, 2020 and reflected a 52-week period (“Fiscal 2020") and fiscal year 2019 ended on August 3, 2019 and reflected a 52-week period (“Fiscal 2019"). All references to “Fiscal 2021” reflect a 52-week period that will end on July 31, 2021. Common Stock Split On December 19, 2019, the Company announced that the Board of Directors (the “Board”) has approved a reverse stock split of the Company’s common stock at a ratio of 1-for-20. Refer to Note 19 for additional information. As a result, the applicable equity and shares information related to prior periods has been restated to reflect this reverse stock split. Discontinued Operations Dressbarn Wind Down In May 2019, the Company announced the wind down of its Dressbarn brand, which was completed in the second quarter of Fiscal 2020. All Dressbarn store locations were closed as of December 31, 2019. Activities during the first and second quarter of Fiscal 2020 include additional employee related accruals, the closure of stores and the negotiation of lease terminations. In addition, during the first quarter of Fiscal 2020, the Company sold the direct channel rights to Dressbarn intellectual property to a third-party for approximately $5 million, which was treated as a reduction of the wind down costs. In connection with the Dressbarn wind down, we have incurred cumulative costs of approximately $58 million of which $5 million was incurred during Fiscal 2020 and the remainder was incurred in Fiscal 2019. The Dressbarn wind down costs have been included in the results disclosed below. The following table summarizes the results of Dressbarn reclassified as discontinued operations: Fiscal Years Ended August 1, August 3, (millions) Net sales $ 326.6 $ 758.7 Depreciation and amortization expense (10.9) (19.5) Operating income (loss) 63.9 (43.1) Pretax income (loss) from discontinued operations 64.5 (43.5) Income tax provision (0.2) (9.4) Income (loss) from discontinued operations, net of tax $ 64.3 $ (52.9) The major components of Dressbarn assets and liabilities related to discontinued operations are summarized below: August 1, August 3, (millions) Cash and cash equivalents $ — $ 4.2 Inventories — 57.0 Prepaid expenses and other current assets 3.5 37.0 Property and equipment, net — 11.5 Total assets related to discontinued operations $ 3.5 $ 109.7 Accounts payable and other current liabilities $ 5.5 $ 94.7 Lease-related liabilities — 29.6 Liabilities subject to compromise 19.9 — Other liabilities 4.0 5.9 Total liabilities related to discontinued operations $ 29.4 $ 130.2 Sale of maurices On May 6, 2019, the Company and Maurices Incorporated, a Delaware corporation (“ maurices ”) and wholly owned subsidiary of ascena, completed the transaction contemplated by the previously-announced Stock Purchase Agreement with Viking Brand Upper Holdings, L.P., a Cayman Islands exempted limited partnership (“Viking”) and an affiliate of OpCapita LLP ("OpCapita”), providing for, among other things, the sale by ascena of maurices to Viking (the “Transaction”). Effective upon the closing of the Transaction, ascena received cash proceeds of approximately $210 million and a 49.6% ownership interest in the operations of maurices through its investment in Viking, consisting of interests in Viking preferred and common stock. As the sale of maurices represented a major strategic shift, as well as the Company's determination that it did not have a significant continuing involvement in the business, the Company's maurices business has been classified as discontinued operations within the consolidated financial statements. As such, assets and liabilities related to discontinued operations have been segregated and separately disclosed in the consolidated financial statements for all periods presented. In connection with the sale of maurices , the Company agreed to provide transition services to maurices for varying periods of time depending on the service. Service periods range from 3-36 months and include services such as legal, tax, logistics, sourcing and other back office functions. Per the agreement, such services are to be provided at the Company's estimated costs to provide the services. As such, in connection with the accounting for the sale, the Company recorded the services at fair value assuming a normalized profit margin. The resulting balance of $10 million was included within Deferred income as of August 3, 2019 and will be recognized over the 3-36 months service period. As of August 1, 2020, approximately $5.3 million remains within Deferred income. In addition, the Company has guaranteed that maurices will receive annual revenues from its private label credit card arrangements in line with those received historically. The guarantee period ranges from June 2019 through May 2023. The Company believes that the income generated by these arrangements will be substantially in line with the amount contemplated by the guarantee and has provided for any projected shortfall as a component of the gain on the sale of maurices . The sale was recorded in the fourth quarter of Fiscal 2019 and resulted in a gain of $44.5 million, net of tax, which was recorded as a component of discontinued operations in the accompanying consolidated statement of operations and was calculated as follows: August 3, (millions) Consideration received: Cash $ 209.8 Investment in Viking 53.9 263.7 Less: Net assets of maurices (201.1) Deferred income of transition services contracts (10.0) Transaction costs (6.7) Other related costs (5.4) Gain on disposition of maurices before taxes 40.5 Income tax benefit from the sale of maurices (a) 4.0 Gain on disposition of maurices after taxes $ 44.5 _______ (a) The Company's tax basis in maurices exceeded that of its book basis. As a result, the Company recorded a tax benefit of $4.0 million on the sale in the fourth quarter of Fiscal 2019. The following table summarizes the results of maurices classified as discontinued operations: Fiscal Year Ended August 3, 2019 (a) Net sales $ 749.4 Depreciation and amortization expense (21.2) Operating income 97.7 Pretax income from discontinued operations 98.2 Income tax expense (21.8) Income from discontinued operations, net of tax $ 76.4 _______ (a) Results for the fiscal year ended August 3, 2019 represent results for the period prior to the sale closing on May 6, 2019 and do not reflect the Gain on the disposition of $44.5 million, which is also included under the discontinued operations line in the Company's consolidated statements of operations. The major components of cash flows related to discontinued operations are summarized below: Fiscal Years Ended August 1, August 3, (millions) Cash provided by operating activities of discontinued operations $ 52.6 $ 71.2 Cash provided by (used in) investing activities of discontinued operations 4.9 (6.4) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Bankruptcy Accounting The Consolidated Financial Statements have been prepared as if we were a going concern and in accordance with Accounting Standards Codification Topic 852, Reorganizations (“ASC 852”). ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, realized gains and losses and provisions for losses that are realized or incurred during the Chapter 11 Cases, including adjustments to the carrying value of certain indebtedness are recorded as “Reorganization items” in the Consolidated Statements of Operations. In addition, prepetition obligations that may be impacted by the Chapter 11 Cases have been classified as “Liabilities subject to compromise” on the Consolidated Balance Sheets at August 1, 2020. These liabilities may be settled for less depending on the claim amounts allowed by the Bankruptcy Court. Revenue Recognition Effective August 5, 2018, the Company adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers,” ("ASU 2014-09"). For retail sales, the performance obligation is the transfer of retail merchandise to the customer at the retail store or at the time of delivery to the customer. Retail store revenue is recognized net of estimated returns at the time of sale to consumers. Direct channel revenue from sales of products ordered through the Company’s retail internet sites is recognized upon delivery and receipt of the shipment by our customers. Such revenue is reduced by an estimate of returns. The Company accounts for sales and other related taxes on a net basis, thereby excluding such taxes from revenue. Reserves for estimated product returns are recorded based on historical return trends and are adjusted for known events, as applicable. As of August 1, 2020, the liability for estimated returns was approximately $14.0 million and the corresponding balance of the right of return asset for merchandise was approximately $7.9 million. There was no liability for estimated returns related to discontinued operations at the end of Fiscal 2020. As of August 3, 2019, the liability for estimated returns was approximately $19.9 million, of which $2.1 million was included in Liabilities related to discontinued operations, and the corresponding balance of the right of return assets for merchandise was approximately $9.7 million. The contract liabilities representing unearned revenue for our continuing operations are as follows: August 1, 2020 August 3, 2019 (millions) Deferred revenue - gift card liability $ 78.4 $ 79.7 Deferred revenue - loyalty programs 21.0 22.1 Gift cards, gift certificates and merchandise credits (collectively, “gift cards”) issued by the Company are recorded as a deferred income liability until they are redeemed, at which point revenue is recognized. Gift cards do not have expiration dates. A substantial majority of all gift cards are redeemed within a 12-month period with the highest redemption period occurring in the same quarter the card was issued. The Company recognizes income for unredeemed gift cards when the likelihood of a gift card being redeemed by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recognized in Net sales over time based on the historical redemption patterns and historically has not been material. The Company recognized revenue of approximately $38 million and $39 million in Fiscal 2020 and Fiscal 2019, respectively, associated with gift card redemptions and gift card breakage. Of these amounts, approximately $6 million and $12 million, respectively, were recorded within Income from discontinued operations. Revenue associated with merchandise shipments to other third-party retailers is recognized at the time title passes and risk of loss is transferred to customers, which generally occurs at the date of shipment. In addition to retail-store, direct channel and third-party sales, the Company's segments recognize revenue from (i) licensing arrangements with franchised stores, (ii) royalty payments received under license agreements for the use of their trade name and (iii) credit card agreements as it is earned in accordance with the terms of the underlying agreements. The Company offers numerous customer loyalty programs for participating customers based on their level of purchases. For every qualifying purchase, the Company defers a portion of the revenue until the loyalty points are redeemed. The transaction price is allocated between the product and the loyalty points based on the relative stand-alone selling price. Loyalty points accumulate until predetermined thresholds are met at which point the loyalty points can be redeemed as a discount off of a future purchase. Substantially all loyalty points are redeemed within a 12-month period. The Company recognized revenue of approximately $24 million and $33 million in Fiscal 2020 and Fiscal 2019, respectively, associated with reward redemptions and breakage related to the Company’s loyalty programs. Of these amounts, approximately $5 million and $9 million, respectively, was recorded within Income from discontinued operations. The Company’s revenues by major product categories as a percentage of total net sales are as follows: Fiscal Years Ended August 1, August 3, Apparel 83 % 82 % Accessories 12 % 13 % Other 5 % 5 % Total net sales 100 % 100 % Cost of Goods Sold Cost of goods sold (“COGS”) consists of all costs of merchandise (net of purchase discounts and vendor allowances), merchandise acquisition costs (primarily commissions and import fees) and freight to our distribution centers and stores. These costs are determined to be directly or indirectly incurred in bringing an article to its existing condition and location. Additionally, the direct costs associated with shipping goods to customers and adjustments to the carrying value of inventory related to realizability and shrinkage are recorded as components of COGS. Our COGS and Gross margin may not be comparable to those of other entities. Some entities, like us, exclude costs related to their distribution network, buying function, store occupancy costs and depreciation and amortization expenses from COGS and include them in other operating expenses, whereas other entities include these costs in their COGS. Buying, Distribution and Occupancy Expenses Buying, distribution and occupancy expenses ("BD&O expenses") consist of store occupancy and utility costs, fulfillment expense (as defined below) and all costs associated with the buying and distribution functions (excluding depreciation). Selling, General and Administrative Expenses Selling, general and administrative expenses (“SG&A expenses”) consist of compensation and benefit-related costs for sales and store operations personnel, administrative personnel and other employees not associated with the functions described above under BD&O expenses. SG&A expenses also include advertising and marketing costs, information technology and communication costs, supplies for our stores and administrative facilities, insurance costs, legal costs and costs related to other administrative services. Restructuring and Other Related Charges Restructuring and other related charges consist of severance and benefit costs, long-lived asset impairment charges and professional fees incurred in connection with identification and implementation of the cost reduction initiatives, the Dressbarn wind down, and the Chapter 11 Cases. Professional fees related to the Chapter 11 Cases after July 23, 2020 are included in Reorganization items, net. Shipping and Fulfillment Shipping and fulfillment fees billed to customers are recorded as revenue. The direct costs associated with shipping goods to customers are recorded as a component of COGS. Costs associated with preparing the merchandise for shipping, such as picking, packing, warehousing and order charges ("fulfillment expense") are recorded as a component of BD&O expenses. Fulfillment expense was approximately $57.7 million in Fiscal 2020 and $65.3 million in Fiscal 2019, of which $1.2 million for Fiscal 2020 and $10.7 million for Fiscal 2019 was recorded within Income from discontinued operations. Marketing and Advertising Costs Marketing and advertising costs are included in SG&A expenses. Marketing and advertising costs are expensed when the advertisement is first exhibited. Marketing and advertising expenses were $184.6 million for Fiscal 2020 and $265.1 million for Fiscal 2019, of which $6.9 million for Fiscal 2020 and $59.9 million for Fiscal 2019 was recorded within Income from discontinued operations. Deferred marketing and advertising costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were not material at the end of either Fiscal 2020 or Fiscal 2019. Foreign Currency Translation and Transactions The operating results and financial position of foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. The resulting translation gains or losses are included in the consolidated statements of comprehensive loss, and in the consolidated statements of equity as a component of accumulated other comprehensive loss (“AOCL”). Gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature also are included within AOCL. The Company recognizes gains and losses on transactions that are denominated in a currency other than the respective entity's functional currency. Foreign currency transaction gains and losses also result from intercompany loans made to foreign subsidiaries that are not of a long-term investment nature and include amounts realized on the settlement of certain intercompany loans with foreign subsidiaries. Net losses from foreign currency transactions were $0.4 million in Fiscal 2020 and $0.7 million in Fiscal 2019, of which losses of $0.1 million for Fiscal 2019 were recorded within Income from discontinued operations. Such amounts are recognized in earnings and included within Interest income and other income, net in the accompanying consolidated statements of operations. Stock-Based Compensation The Company expenses stock-based compensation to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. The Company uses the Black-Scholes valuation method to determine the grant date fair value of its service-based option compensation and a Monte Carlo simulation model to determine the grant date fair value of its market and performance-based option compensation. Shares of restricted stock and restricted stock units are issuable with service-based, market-based or performance-based conditions (collectively, “Restricted Equity Awards”). Compensation expense for Restricted Equity Awards is recognized over the vesting period based on the grant-date fair values of the awards that are expected to vest based upon the service, market and performance-based conditions. Long-Term Incentive Plans The Company maintains a long-term cash incentive program ("LTIP") which entitles the holder to a cash payment equal to a target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over a three Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less and receivables from financial institutions related to credit card purchases due to the high-credit quality and short time frame for settlement of the outstanding amounts. Concentration of Credit Risk The Company maintains cash deposits and cash equivalents with well-known and stable financial institutions; however, there were significant amounts of cash and cash equivalents on deposit at overseas financial institutions as well as at financial institutions that were in excess of FDIC-insured limits at August 1, 2020. Inventories Retail Inventory Method We hold inventory for sale through our retail stores and direct channel sites. The Company’s Plus Fashion and Kids Fashion segments use the retail inventory method of accounting, under which inventory is stated at the lower of cost, on a First In, First Out (“FIFO”) basis, or market. Under the retail inventory method, the valuation of inventory at cost and the resulting gross margin are calculated by applying a calculated cost to retail ratio to the retail value of inventory. Inherent in the retail method are certain significant management judgments and estimates including, among others, initial merchandise markup, markdowns and shrinkage, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to a number of quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and mix of products in inventory, as well as changes in consumer preferences, market and economic conditions. The Company’s historical estimates of these costs and its markdown provisions have not differed materially from actual results. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. Weighted-average Cost Method Our Premium Fashion segment uses the weighted-average cost method to value inventory, under which inventory is valued at the lower of average cost or net realizable value. Inventory cost is adjusted when the current selling price or future estimated selling price is less than cost. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. Property and Equipment, Net Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Buildings and improvements 5-40 years Distribution center equipment and machinery 3-20 years Leasehold improvements Shorter of the useful life or expected term of the lease Furniture, fixtures, and equipment 2-10 years Information technology 2-10 years Certain costs associated with computer software developed or obtained for internal use are capitalized, including internal costs. The Company capitalizes certain costs for employees that are directly associated with internal use computer software projects once specific criteria are met. Costs are expensed for preliminary stage activities, training, maintenance and all other post-implementation stage activities as they are incurred. Property and equipment, along with other long-lived assets, such as right-of-use assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. In evaluating long-lived assets for recoverability, including finite-lived intangible assets as described below, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan of disposal are reported at the lower of carrying value or fair value less costs to sell. Goodwill and Other Intangible Assets, Net At acquisition, the Company estimates and records the fair value of purchased intangible assets, which primarily consist of certain trade names, customer relationships, favorable leases, proprietary software and franchise rights. The fair value of these intangible assets is estimated based on management's assessment, considering independent third-party appraisals, when necessary. The excess of the purchase consideration over the fair value of net assets acquired is recorded as goodwill. Goodwill and certain other intangible assets deemed to have indefinite useful lives, including trade names and certain franchise rights, are not amortized but assessed for impairment annually, typically during the fourth quarter of each fiscal year, or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable. Such assessment is performed using a quantitative approach at the reporting unit level. In the fourth quarter of Fiscal 2019, the Company determined that several discrete events had occurred which changed the manner in which the business was expected to be managed going forward. The sale of maurices , the announced wind down of the Dressbarn brand, as well as the changes in senior management, including the appointment of a new Chief Operating Decision Maker (“CODM”), all occurred in the same period. After considering the impact of all these changes, the Company concluded that its new management began requesting more discrete operating information related to its Ann Taylor and LOFT businesses, which are components of the Premium Fashion segment. Therefore, since new management, which included the Company's chief operating decision maker, was beginning to look at the components separately, and beginning to make decisions and allocate resources on that basis, the Company concluded that these components meet the definition of separate operating segments. Given that the determination of a reporting unit for purposes of goodwill impairment testing cannot be at a level higher than the operating segment, the Company determined that Ann Taylor and LOFT met the definition of separate operating segments and therefore goodwill has been separately allocated to these two units. A goodwill impairment loss is recognized in an amount equal to the excess of the reporting unit's carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. The impairment test for other indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value. The fair value of indefinite-lived intangible assets is primarily determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to the excess. In addition, in evaluating finite-lived intangible assets for recoverability, we use our best estimate of future cash flows expected to result from the use of the asset and eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value. Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets (as discussed above), are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. Refer to the Company's accounting policy for long-lived asset impairment as described earlier under the caption "Property and Equipment, Net." Investments Accounting Standards Codification (“ASC”) 810—Consolidation (“ASC 810”) requires the consolidation of all entities for which a Company has a controlling voting interest and all variable interest entities (“VIEs”) for which a Company is deemed to be the primary beneficiary. An entity is generally a VIE if it meets any of the following criteria: (i) the entity has insufficient equity to finance its activities without additional subordinated financial support from other parties, (ii) the equity investors cannot make significant decisions about the entity’s operations or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity or receive the expected returns of the entity and substantially all of the entity’s activities involve or are conducted on behalf of the investor with disproportionately few voting rights. For those entities that are not considered VIEs, or are considered VIEs but the Company is not the primary beneficiary, the Company uses either the equity method or the cost method of accounting, depending on a variety of factors as set forth in ASC 323—Investments (“ASC 323”), to account for those investments which are not required to be consolidated under U.S. GAAP. Insurance Reserves The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers’ compensation, general liability and employee healthcare benefits. Liabilities associated with these risks are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Such liabilities are capped through the use of stop-loss contracts with insurance companies. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. As of August 1, 2020 these reserves were $55.1 million and as of August 3, 2019 they were $60.8 million of which $9.6 million and $15.7 million was recorded within Liabilities from discontinued operations as of August 1, 2020 and August 3, 2019, respectively. The Company is subject to various claims and contingencies related to insurance and other matters arising out of the normal course of business. The Company is self-insured for expenses related to its employee medical and dental plans, its workers’ compensation plan and its general liability plan, up to certain thresholds. Claims filed, as well as claims incurred but not reported, are accrued based on management’s estimates, using information received from plan administrators, historical analysis and other relevant data. The Company’s stop-loss insurance coverage limit for individual claims under these policies is $750,000 for medical claims, $500,000 for workers' compensation claims and $150,000 for general liability claims. The Company believes its accruals for claims and contingencies are adequate based on information currently available. However, it is possible that actual results could differ significantly from the recorded accruals for claims and contingencies. Income Taxes Income taxes are provided using the asset and liability method. Under this method, income taxes (i.e., deferred tax assets and liabilities, current taxes payable/refunds receivable and tax expense) are recorded based on amounts refundable or payable in the current year, and include the results of any differences between U.S. GAAP and tax reporting. Deferred income taxes reflect the tax effect of net operating loss, capital loss and general business credit carry forwards and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The Company accounts for the financial effect of changes in tax laws or rates in the period of enactment. Valuation allowances are established when management determines that it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Tax valuation allowances are analyzed periodically and adjusted as events occur, or circumstances change, that warrant adjustments to those balances. In determining the income tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more-likely-than-not of being sustained upon audit, based solely on the technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. These assessments can be complex and the Company often obtains assistance from external advisors. To the extent that the Company’s estimates change or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. If the initial assessment fails to result in the recognition of a tax benefit, the Company regularly monitors its position and subsequently recognizes the tax benefit if (i) there are changes in tax law or analogous case law that sufficiently raise the likelihood of prevailing on the technical merits of the position to more-likely-than-not, (ii) the statute of limitation expires or (iii) there is a completion of an audit resulting in a settlement of that tax year with the appropriate agency. Uncertain tax positions are classified as current only when the Company expects to pay cash within the next twelve months. Interest and penalties, if any, are recorded within the Benefit (provision) for income taxes in the Company’s accompanying consolidated statements of operations and are classified on the accompanying consolidated balance sheets with the related liability for uncertain tax positions. Leases |
Leases
Leases | 12 Months Ended |
Aug. 01, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company has leases related to its Company-operated retail stores as well as for certain of its distribution centers, office space, information technology and equipment. A summary of the Company’s operating lease costs from continuing operations is as follows: Fiscal Year Ended August 1, (millions) Single lease costs (a) $ 368.9 Variable lease costs (b) 201.4 Total lease expenses 570.3 Less rental income (c) (3.9) Total net rental expense (d) $ 566.4 ________ (a) Includes amortization and interest expense associated with operating lease right-of-use assets and liabilities. (b) Includes variable payments related to both lease and non-lease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as month-to-month rent payments while expired store lease contracts are renegotiated. (c) Substantially reflects rental income received related to Company-owned space in Duluth, MN. (d) Total occupancy costs included in discontinued operations related to Dressbarn were $31.8 million for the year ended August 1, 2020. The following table provides a summary of the Company’s operating lease costs from continuing operations for the year ended August 3, 2019, which was accounted for in accordance with Accounting Standards Codification (“ASC”) 840, “Leases” (“ASC 840”). Fiscal Year Ended August 3, (millions) Base rentals $ 395.9 Percentage rentals 26.0 Other occupancy costs, primarily CAM and real estate taxes 171.8 Total (a) $ 593.7 ________ (a) Total occupancy costs included in discontinued operations were $191.5 million for the year ended August 3, 2019. The weighted-average remaining lease term of the Company’s operating leases and the weighted-average discount rates used to calculate the Company’s operating lease liabilities are as follows: August 1, Weighted-average remaining lease term (years) 5.3 Weighted-average discount rate 25.4% The following table provides a maturity analysis of the Company’s operating lease liabilities, based on undiscounted cash flows, as of August 1, 2020: Fiscal Years Minimum Operating Lease Payments (a) (b) (millions) 2021 $ 351.8 2022 287.6 2023 211.7 2024 148.0 2025 101.8 Thereafter 360.4 Total undiscounted operating lease liabilities 1,461.3 Less imputed interest (679.6) Present value of operating lease liabilities 781.7 Less current portion of lease liabilities (0.6) Less long-term lease liabilities (0.8) Total lease liabilities, included in Liabilities subject to compromise (c) $ 780.3 ________ (a) Net of sublease income, which is not expected to be significant in any period. (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. (c) As of August 1, 2020, a substantial amount of the current portion of operating leases liabilities and the long-term lease liabilities balances were classified to Liabilities subject to compromise, which is further discussed in Note 2. As of August 1, 2020, the Company had no minimum commitments related to additional operating lease contracts that have not yet commenced. As reported under the previous accounting standard, the following table provides a summary of total consolidated operating lease commitments, including leasehold financing obligations, under non-cancelable leases as of August 3, 2019: Fiscal Years Minimum Operating Lease Payments (a) (b) (millions) 2020 $ 462.0 2021 402.3 2022 325.4 2023 242.7 2024 172.6 Thereafter 563.3 Total future minimum rentals $ 2,168.3 ________ (a) Net of sublease income, which is not expected to be significant in any period. (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. Supplemental disclosures related to leases are as follows: Fiscal Year Ended August 1, (millions) Cash payments arising from operating lease liabilities (included in cash flows from operating activities) $ 265.6 Non-cash operating lease liabilities from obtaining right-of-use assets 4.4 Beginning in April 2020, we suspended rent payments under the leases for our temporarily closed retail stores. We considered FASB’s recent guidance regarding lease modifications as a result of the effects of COVID-19 and have elected to apply the temporary practical expedient to account for negotiated changes to our leases. Despite the suspension of the rent payments, we continued to record accruals for rent payment deferrals and accounted for deferred rental payments as though no changes to the lease contract were made. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Aug. 01, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following details the changes in goodwill for each reportable segment: Premium Fashion (a) Plus Fashion (b) Kids Fashion (c) Total (millions) Balance at August 4, 2018 $ 305.0 $ 115.1 $ 169.4 $ 589.5 Impairment losses — (115.1) (160.9) (276.0) Balance at August 3, 2019 305.0 — 8.5 313.5 Impairment losses (140.4) — (8.5) (148.9) Balance at August 1, 2020 $ 164.6 $ — $ — $ 164.6 ________ (a) Net of accumulated impairment losses of $569.3 million and $428.9 million for the Premium Fashion segment of August 1, 2020 and August 3, 2019, respectively. (b) Represents the Plus Fashion segment impairment losses as of August 3, 2019, which $65.8 million and $49.3 million relates to Lane Bryant and Catherines reporting units, respectively. The accumulated impairment loss at the Lane Bryant and Catherines reporting units as of August 1, 2020 and August 3, 2019 was $387.7 million and $49.3 million, respectively. (c) Net of accumulated impairment losses of $169.4 million and $160.9 million for the Kids Fashion segment impairment losses as of August 1, 2020 and August 3, 2019, respectively. Ot her Intangible Assets As more fully described in Note 5, favorable leases have been reclassified from Other intangible assets, net to Operating lease right-of-use assets within the consolidated balance sheet due to the recent adoption of ASC 842. Other intangible assets, reflecting the change, as well as the impairments discussed below, now consist of the following: August 1, 2020 August 3, 2019 Description Gross Accumulated Net Gross Accumulated Net Intangible assets not subject to amortization : (millions) Brands and trade names (a) $ 134.2 $ — $ 134.2 $ 252.0 $ — $ 252.0 Franchise rights (a) — — — 10.9 — 10.9 Total intangible assets not subject to amortization 134.2 — 134.2 262.9 — 262.9 Intangible assets subject to amortization (b) : Proprietary technology 4.8 (4.8) — 4.8 (4.8) — Customer relationships 52.0 (52.0) — 52.0 (46.7) 5.3 Favorable leases — — — 38.2 (29.8) 8.4 Trade names 5.3 (5.3) — 5.3 (5.3) — Total intangible assets subject to amortization 62.1 (62.1) — 100.3 (86.6) 13.7 Total intangible assets $ 196.3 $ (62.1) $ 134.2 $ 363.2 $ (86.6) $ 276.6 ________ (a) The Company recorded impairment charges related to trade names during Fiscal 2020 and Fiscal 2019, as discussed by reporting unit below. (b) There were no finite-lived intangible asset impairment losses recorded for any of the periods presented. Amortization The Company recognized amortization expense on finite-lived intangible assets, excluding favorable leases discussed below, of $5.3 million in Fiscal 2020 and $7.0 million in Fiscal 2019, which is classified within Depreciation and amortization expense in the accompanying consolidated statements of operations. The Company amortizes customer relationships recognized as part of the acquisition of ANN INC. (the " ANN Acquisition") over five Prior to the adoption of ASC 842 in Fiscal 2020, favorable leases were amortized into either Buying, distribution and occupancy expenses or Selling, general and administrative expenses over a weighted-average lease term of approximately four Goodwill and Other Indefinite-lived Intangible Assets Impairment Assessment As discussed in Note 4, the Company typically performs its annual impairment assessment of goodwill and indefinite-lived intangible assets during the fourth quarter of each fiscal year unless a triggering event has occurred in a previous quarter. The impairment test for other indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to the excess. Fiscal 2020 Second Quarter Interim Impairment Assessment The second quarter of Fiscal 2020 marked the continuation of the challenging market environment in which the Company competes. While the Company met its overall expectations for the second quarter, lower than expected comparable sales in the second quarter at the Justice brand, and lower than expected margins at our Ann Taylor brand, along with the expectation that such trends may continue into the second half of Fiscal 2020, led the Company to reduce its level of forecasted earnings for Fiscal 2020 and future periods. Since these brands had little or no excess of fair value over their respective book value at the beginning of Fiscal 2020, the Company concluded that these factors represented impairment indicators which required the Company to test its goodwill and indefinite-lived intangible assets for impairment during the second quarter of Fiscal 2020 (the "January Interim Test"). The Company performed its January Interim Test of goodwill and indefinite-lived intangible assets using a quantitative approach as of January 4, 2020, which was the last day in the second month of the second fiscal quarter. The January Interim Test was determined with the assistance of an independent valuation firm using two valuation approaches, including the income approach (discounted cash flow method ("DCF")) and market approach (guideline public company method). The Company believes that the income approach (Level 3 measurement) is the most reliable indication of value as it captures forecasted revenues and earnings for the reporting units in the projection period that the market approach may not directly incorporate. Under the market approach, the Company estimated a fair value based on comparable companies' market multiples of revenues and earnings before interest, taxes, depreciation and amortization, and used the market approach as a comparison of respective fair values. We generally applied a 75% weighting to the income approach and a 25% weighting to the market approach. However, in certain cases where low profit margins made the market approach impracticable, we applied a full weighting to the income approach. Finally, the Company’s publicly traded market capitalization was reconciled to the sum of the fair value of the reporting units. The projections used in the January Interim Test reflect revised assumptions across certain key areas versus prior plans as a result of the recent operating trends discussed above. Based on the results of the impairment assessment, the fair value of our LOFT reporting unit exceeded its carrying value by approximately 14%. Changes in key assumptions and the resulting reduction in projected future cash flows included in the January Interim Test resulted in a decrease in the fair values of our Ann Taylor and Justice reporting units such that their fair values were less than their carrying values. As a result, the Company recognized the following goodwill impairment charges: a loss of $54.9 million at the Ann Taylor reporting unit and $8.5 million at the Justice reporting unit to write-down the carrying values of the reporting units to their fair values. In addition, the Company recognized impairment losses to write-down the carrying values of its other intangible assets to their fair values as follows: $10.0 million of our Ann Taylor trade name, $35.0 million of our Justice trade name, $1.0 million of our Catherines trade name and $0.9 million of our Justice franchise rights. The fair value of the trade names was determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name (Level 3 measurement). Fiscal 2020 Third Quarter Interim Impairment Assessment The third quarter of Fiscal 2020 reflected a significant decline in the Company’s stock price and the fair value of our Term Loan debt due to the financial market uncertainty from COVID-19 which also resulted in the closure of our retail stores and led to a substantial decrease in our retail store revenue. The Company concluded that these factors represented impairment indicators which required the Company to test its goodwill and indefinite-lived intangible assets for impairment during the third quarter of Fiscal 2020. As a result, the Company performed its second interim test of goodwill and indefinite-lived intangible assets for Fiscal 2020 (the “April Interim Test”) using a quantitative approach as of May 2, 2020, which was the last day of the third fiscal quarter. The April Interim Test was determined by the Company only using the income approach (discounted cash flow method ("DCF")) as the market approach (guideline public company method) was deemed unrepresentative due to the volatility and disruption in the global financial markets caused by COVID-19. The Company believes that the income approach (Level 3 measurement) is the most reliable indication of value as it captures forecasted revenues and earnings for the reporting units in the projection period that the market approach may not directly incorporate. Finally, the Company’s publicly traded market capitalization was reconciled to the sum of the fair value of the reporting units. The projections used in the April Interim Test reflect revised assumptions across certain key areas versus the assumptions used in the January Interim Test of Fiscal 2020 discussed below and primarily reflected revised long-range assumptions that were prepared in contemplation of the Chapter 11 Cases discussed earlier. Those assumptions include the wind down of the Catherines brand, a significant reduction in the number of Justice retail stores, an overall reductions in the number of retail stores at the Company’s other brands, and a significant reduction in the Company’s workforce commensurate with the store reductions. Changes in key assumptions and the resulting reduction in projected future cash flows included in the April Interim Test resulted in a decrease in the fair values of our Ann Taylor and LOFT reporting units such that their fair values were less than their carrying values. As a result, the Company recognized the following goodwill impairment charges: a loss of $15.0 million at the Ann Taylor reporting unit and $70.5 million at the LOFT reporting unit to write-down the carrying values of the reporting units to their fair values. In addition, the Company recognized impairment losses to write-down the carrying values of its other intangible assets to their fair values as follows: $17.7 million of our Ann Taylor trade name, $7.8 million of LOFT trade name, $7.8 million of our Justice trade name, $3.0 million of our Catherines trade name and $5.0 million of our Justice franchise rights. The fair value of the trade names was determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name (Level 3 measurement). Fiscal 2020 Fourth Quarter Assessment The Company performed its regular annual assessment at the beginning of the fourth quarter and did not note any impairment of goodwill or intangible assets as it had just completed the April Interim Test. However, on July 23, 2020, the Company and certain of the Company’s direct and indirect subsidiaries filed for Chapter 11 Cases with the United States Bankruptcy Court, discussed further in Note 2, which led the Company to conclude this represented further impairment indicators. As a result, the Company was required to test its goodwill and indefinite-lived intangible assets for impairment at the end of the fourth quarter of Fiscal 2020 (the Year-End Test"). The Year-End Test was determined with the assistance of an independent valuation firm using the same methodologies as the April Interim Test. The cash flow projections underlying the Year-End Test reflected revised assumptions for Fiscal 2021 and Fiscal 2022 based on the current consumer demand, the continuation of the negative impacts of COVID-19 and the potential release of a vaccine during Fiscal 2021 with the expectation that the Company will be back in line with the original long-range projections for Fiscal 2023 and beyond. As of the third quarter of Fiscal 2020, only our LOFT brand had goodwill remaining and was tested for goodwill impairment in the fourth quarter. The discount rate used for the LOFT brand in the Year-End test is 25.5% which was a slight increase from 24.9% used in the April Interim Test. The Year-End Test indicated the fair value of the LOFT brand exceeded its carrying value by approximately 11% and as a result no goodwill impairment charge was required in the fourth quarter. Based on the results of the Year-End Test, the Company recognized impairment charges to write-down the carrying values of its other intangible assets to their fair values as follows: $34.2 million on the LOFT trade name and $1.3 million on the Ann Taylor trade name. In addition, the Company impaired the remaining Justice franchise rights of $5.0 million as the Company will no longer be supporting this business strategy. Indefinite-lived intangible asset impairment charges have been disclosed separately in the accompanying consolidated statements of operations. Fiscal 2019 Interim Impairment Assessment The third quarter of Fiscal 2019 marked the continuation of the challenging market environment in which the Company competes. Continued declines in customer traffic across the Company's brands negatively impacted our February and March performance causing lower comparative sales than expected, along with the expectation that such trends may continue into the fourth quarter. The Company concluded that these factors, as well as the significant decline in the Company's stock price, represented impairment indicators which required the Company to test its goodwill and indefinite-lived intangible assets for impairment during the third quarter of Fiscal 2019 (the "Interim Test"). As a result, the Company performed its Interim Test of goodwill and indefinite-lived intangible assets using a quantitative approach as of April 6, 2019, which was the last day in the second month of the third fiscal quarter. The Interim Test was determined with the assistance of an independent valuation firm using two valuation approaches, including the income approach (discounted cash flow method ("DCF")) and market approach (guideline public company method). The Company believes that the income approach (Level 3 measurement) is the most reliable indication of value as it captures forecasted revenues and earnings for the reporting units in the projection period that the market approach may not directly incorporate. Therefore, a greater weighting was applied to the income approach than the market approach. The weighing of the fair values by valuation approach (income approach vs. market approach) is generally consistent across all reporting units. For substantially all of the reporting units the income approach was weighted 75% and the market approach 25%. Under the market approach, the Company estimated a fair value based on comparable companies' market multiples of revenues and earnings before interest, taxes, depreciation and amortization, factored in a control premium, and used the market approach as a comparison of respective fair values. The estimated fair value determined under the market approach validated our estimate of fair value determined under the income approach. The only difference to the 75% / 25% weighting was at the Catherines reporting unit where the income approach was weighted 100% as the resulting low profit margins made the market approach impracticable. This approach at Catherines had no impact on the overall conclusion. Further, the Company's maurices reporting unit was valued utilizing the sales price inherent in the Transaction described in Note 3. Finally, the Company’s publicly traded market capitalization was reconciled to the sum of the fair value of the reporting units. The projections used in the Interim Test reflect revised assumptions across certain key areas versus prior plans as a result of recent operating performance. In particular, sales growth assumptions were significantly lowered at certain brands to reflect the shortfall in actual results versus those previously projected, reflecting the uncertainty of future comparable sales given the sector's dynamic change. Based on the results of the impairment assessment, the fair value of our ANN , Justice and maurices reporting units significantly exceeded their carrying value. Conversely, the changes in key assumptions and the resulting reduction in projected future cash flows included in the Interim Test resulted in a decrease in the fair values of our Lane Bryant and Catherines reporting units such that their fair values were less than their carrying values. As a result, the Company recognized impairment losses to write down the carrying values of its trade name intangible assets to their fair values as follows: $23.0 million of our Lane Bryant trade name and $2.0 million of our Catherines trade name. The fair value of the trade names was determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name (Level 3 measurement). In addition, the Company recognized the following goodwill impairment charges: a loss of $65.8 million at the Lane Bryant reporting unit and $49.3 million at the Catherines reporting unit to write down the carrying values of the reporting units to their fair values. These impairment losses have been disclosed separately on the face of the accompanying consolidated statements of operations. Fiscal 2019 Fourth Quarter Assessment The Company performed its regular annual assessment at the beginning of the fourth quarter and did not note any impairment of goodwill or intangible assets as it had just completed the Interim Test. However, during the fourth quarter of Fiscal 2019, the Company's stock price again declined significantly, dropping from the price used in the Interim Test of $1.20 to a value of $0.33 at the end of Fiscal 2019. This decline, coupled with a decline in the fair value of the Company's Term Loan, as defined herein, and discussed in Notes 12 and 16, led the Company to conclude that the items represented further impairment indicators which again required the Company to test its goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of Fiscal 2019 (the "Year-End Test"). The Year-End Test was determined with the assistance of an independent valuation firm using the same methodologies as the Interim Test. While the actual cash flows achieved in the fourth quarter of Fiscal 2019 differed from the projected Fiscal 2019 cash flows used in the Interim Test, the Company concluded that the primary difference arose from differences in gross margin rate, which resulted from the higher inventory levels experienced during Fiscal 2019. As a result, the Company concluded that the changes did not substantially impact the cash flow estimates used for the future years, therefore the cash flow projections underlying the Year-End Test were substantially the same as those used in the Interim Test. The primary driver of the change in value was the change in the discount rate assumption. In the Interim Test, the discount rate ranged from 14%-15%. Because of declines in the Company's stock price and the fair value of the Company's Term Loan, the discount rate used in the Year-End Test ranged from 27%-29%. Primarily as a result of the significantly higher discount rate assumption in the Year-End Test, the fair value of the Justice reporting unit, which significantly exceeded its carrying value as of the Interim Test, was less than its carrying value in the Year-End Test. Based on the results of the impairment assessment, the fair value of ANN, which significantly exceeded its carrying value in the Interim Test, still significantly exceeded its carrying value in the Year-End Test, however by a lower amount. Additionally, as a result of the previously described change in operating segments during the fourth quarter which led to Ann Taylor and LOFT being identified as separate reporting units not subject to further aggregation, we performed an initial test on those units utilizing a similar approach as that used for the ANN test described above. The discount rates used were 27% for LOFT and 28% for Ann Taylor . Based on the conclusions of the Year-End Test, the Company recognized impairment losses to write-down the carrying values of its trade name intangible assets to their fair values as follows: $15.0 million of our Ann Taylor trade name, $60.3 million of our LOFT trade name, $14.0 million of our Lane Bryant trade name, $4.0 million of our Catherines trade name and $16.6 million of our Justice trade name. In addition, the Company recognized a goodwill impairment charge of $160.9 million at the Justice reporting unit to write-down the carrying values of the reporting units to their fair values. These impairment losses have been disclosed separately in the accompanying consolidated statements of operations. |
Restructuring and Other Related
Restructuring and Other Related Charges | 12 Months Ended |
Aug. 01, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | Restructuring and Other Related Charges In recent years, the Company incurred restructuring-related costs related to its transformation activities and cost-reduction efforts. Some of those efforts focused on advanced data capabilities, particularly in the areas of markdown optimization, inventory planning, and customer analytics, as well as the transition of certain transaction processing functions within the brand services group to an independent third-party managed-service provider. Other activities during that time included the ongoing fleet review whereby the Company continued to renegotiate leases and close stores. In Fiscal 2020, the primary areas of focus were completion of previously announced activities, continued cost-reduction efforts and, in the wake of the Chapter 11 Cases, the closure of additional stores. The planned store closures resulted in the non-cash impairment and acceleration of the underlying store assets. As a result of the cost reduction initiatives, the Company incurred the following charges, which are included within Restructuring and other related charges: Fiscal Years Ended August 1, 2020 August 3, 2019 Cash restructuring charges: (millions) Severance and benefit costs (a) $ 29.3 $ 16.1 Other related charges (b) 19.7 33.1 Total cash charges 49.0 49.2 Non-cash charges: Impairment and acceleration of store assets (c) 189.3 44.9 Total non-cash charges 189.3 44.9 Total restructuring and other related charges $ 238.3 $ 94.1 _______ (a) Severance and benefit costs reflect severance accruals as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. (b) Other related charges in Fiscal 2020 consist primarily of professional fees incurred in connection with the Chapter 11 cases prior to July 23, 2020. Charges in Fiscal 2019 consist of professional fees and other third-party costs incurred in connection with the identification and implementation of transformation initiatives. (c) Non-cash asset impairments in Fiscal 2020 primarily reflect write-offs of assets related to stores that are closing as a result of the Chapter 11 Cases. Charges in Fiscal 2019 reflect the write-down of corporate-owned office buildings in Duluth, MN and Mahwah, NJ to fair market value. A summary of activity for Fiscals 2019 and 2020 in the restructuring-related liabilities, which is included within Accrued expenses and other current liabilities, is as follows: Severance and benefit costs Other related charges Total (millions) Balance at August 4, 2018 $ 4.0 $ 6.0 $ 10.0 Additions charged to expense (a) 20.8 33.1 53.9 Cash payments (6.0) (38.7) (44.7) Balance at August 3, 2019 18.8 0.4 19.2 Additions charged to expense 29.3 19.7 49.0 Cash payments (19.5) (19.7) (39.2) Balance at August 1, 2020 $ 28.6 $ 0.4 $ 29.0 _______ |
Inventories
Inventories | 12 Months Ended |
Aug. 01, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories substantially consist of finished goods merchandise. Inventory by segment is set forth below: August 1, August 3, (millions) Premium Fashion $ 184.6 $ 226.3 Plus Fashion 98.3 156.5 Kids Fashion 55.3 107.9 Total inventories $ 338.2 $ 490.7 The significant reduction in inventories from August 3, 2019 to August 1, 2020 primarily reflects a decrease in inventory purchases in response to lower demand resulting from COVID-19. The reduction also reflects an increase of $37.0 million in inventory markdown reserves as of August 1, 2020 mainly at the Plus Fashion and Kids Fashion segments, which follow the retail-method of accounting for inventory. Refer to Note 4 for more information on the Company’s accounting for inventory. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Aug. 01, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net, consist of the following: August 1, August 3, (millions) Property and Equipment: Land $ 13.2 $ 22.5 Buildings and improvements 144.2 194.8 Leasehold improvements 540.2 669.3 Furniture, fixtures and equipment 485.1 497.0 Information technology 790.4 793.8 Construction in progress 4.9 13.6 1,978.0 2,191.0 Less: accumulated depreciation (1,511.7) (1,355.5) Property and equipment, net $ 466.3 $ 835.5 Long-Lived Asset Impairments The charges below reduced the net carrying value of certain long-lived assets to their estimated fair value, as determined using discounted expected cash flows, which are classified as Level 3 measurements in the fair value measurements hierarchy. These impairment charges arose from the Company's routine assessment of under-performing retail stores and are included as a component of Selling, general and administrative expenses in the accompanying consolidated statements of operations for all periods. Impairment charges related to retail store assets by segment are as follows: Fiscal Years Ended August 1, August 3, (millions) Premium Fashion $ 115.3 $ 2.2 Plus Fashion 25.2 17.8 Kids Fashion 56.3 1.7 Total impairment charges (a) $ 196.8 $ 21.7 ________ (a) The Company incurred additional impairment charges, which are considered to be outside the Company’s typical quarterly real-estate review. These additional charges are included within Restructuring and other related charges and are more fully described in Note 8. Additionally, a long-lived Corporate asset impairment charges of $12.9 million was recorded during the second half of Fiscal 2020 which reflects an $8.4 million write-down of the book value of the Company’s campus in Mahwah, New Jersey to fair market value in connection with its planned sale, which closed in the fourth quarter of Fiscal 2020, and a $4.5 million write-down of the Duluth, Minnesota office building to its fair market value. Depreciation |
Investment and Variable Interes
Investment and Variable Interest Entity (Notes) | 12 Months Ended |
Aug. 01, 2020 | |
Investment and Variable Interest Entity [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | Investment and Variable Interest Entity As discussed in Note 3, on May 6, 2019, the Company and OpCapita completed the Transaction which provided for, among other things, the sale by ascena of maurices to Viking. Effective upon the closing of the Transaction, ascena received cash proceeds of approximately $210 million and a 49.6% ownership interest in the operations of maurices through its investment in Viking, consisting of interests in Viking preferred and common stock. Viking's operations substantially consist of its investment in maurices . At inception, the Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and OpCapita, that Viking is a VIE and not subject to consolidation, as the Company is not the primary beneficiary of Viking because the Company does not have the power to direct the activities that most significantly impact Viking’s economic performance. As a result, the Company has recorded its initial investment in Viking of $53.9 million, based on a third-party valuation that utilized a binomial lattice model, and will account for its investment under the equity method of accounting. As part of the Transaction, the Company has guaranteed that maurices will receive annual revenues from its private label credit card arrang ements in line with those received historically ov er the period ranging from June 2019 through May 2023. The Company believes that the income generated by these arrangements will be substantially in line with the amount contemplated by the guarantee and has provided for the projected shortfall as a component of the gain on the sale of maurices . The Company recorded income from Viking of approximately $3.1 million for the year ended August 1, 2020, which primarily represents results from the operations of maurices . The Company recognized its share of the income in the accompanying consolidated statement of operations which was determined by using the hypothetical liquidation at book value ("HLBV"). HLBV is a balance sheet approach whereby a calculation is prepared at each balance sheet date to determine the amount that the Company would receive if the underlying equity investment entity were to liquidate all of its assets (as valued in accordance with GAAP) and distribute that cash to its investors based on the contractually defined liquidation priorities. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is the Company's share of the earnings or losses from the equity investment for that period. In connection with the sale of maurices , the Company agreed to provide transition services to maurices for varying periods of time depending on the service. Service periods range from 3-36 months and include services such as legal, tax, logistics, sourcing and other back office functions. For the year ended August 1, 2020, the Company recognized fees from these services of approximately $62.3 million, which are primarily recorded as a reduction of Buying, distribution and occupancy expenses and Selling, general and administrative expenses. As of August 1, 2020, the Company's investment in Viking was recorded at $45.2 million and the Company had a receivable due from maurices of $35.3 million, primarily for in-transit inventory purchased on their behalf. Of the receivable balance, $12 million is classified in non-current assets. There were no amounts due to maurices as of August 1, 2020. The Company's investment balance, plus the receivable and the private label credit card revenue guarantee, both previously discussed, represent our maximum exposures to any potential loss. The private label credit card revenue guarantee is recorded at its estimated fair value as of August 1, 2020 using Level 3 measurements and is not materially different from the amount recorded as of August 3, 2019. |
Debt
Debt | 12 Months Ended |
Aug. 01, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following: August 1, August 3, (millions) Revolving credit facility $ 230.0 $ — Less: unamortized debt issuance costs (a) (2.1) (3.2) 227.9 (3.2) Term loan 1,271.6 1,371.5 Less: unamortized original issue discount (b) (8.9) (13.8) unamortized debt issuance costs (b) (10.1) (15.9) 1,252.6 1,341.8 Total debt 1,480.5 1,338.6 Less: current portion (227.9) — Less: Liabilities subject to compromise (c) (1,252.6) — Total long-term debt $ — $ 1,338.6 _______ (a) Prior to the Chapter 11 Cases, the unamortized debt issuance costs were amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) Prior to the Chapter 11 Cases, the original issue discount and debt issuance costs for the term loan were amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. (c) See Note 2 for additional information. Chapter 11 Cases On July 23, 2020, the Company filed the Chapter 11 Cases, which impact both the Company’s obligations under the Amended Revolving Credit Agreement and Term Loan. Following the commencement of the Chapter 11 Cases, the Company may not make borrowings under the Amended Revolving Credit Agreement. As of August 1, 2020, the Term Loan is classified as Liabilities subject to compromise. Refer to Note 2 for additional information. Amended Revolving Credit Agreement (Prior to Chapter 11 Cases) On February 27, 2018, the Company and certain of its domestic subsidiaries entered into an amendment and restatement of its revolving credit agreement dated January 3, 2011, as amended and restated as of June 14, 2012, as of March 13, 2013 and as of July 24, 2015, among the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the "Amended Revolving Credit Agreement"). The Amended Revolving Credit Agreement provides aggregate revolving commitments up to $500 million, with an optional increase of up to $200 million. The revolving credit facility may be used for the issuance of letters of credit, to fund working capital requirements and capital expenditures, and for general corporate purposes. The revolving credit facility also includes a $200 million letter of credit sublimit, all of which can be used for standby letters of credit pursuant to an amendment to the revolving credit facility dated September 20, 2019, and a $30 million swingline loan sublimit. The interest rates, pricing and fees under the agreement fluctuate based on the average daily availability, as defined therein. The Amended Revolving Credit Agreement has a maturity of the earlier of (i) five On March 16, 2020, the Company borrowed approximately $230 million under the Amended Revolving Credit Agreement, which represented at such time the total amount then available. The blended interest rate for the borrowings under the Amended Revolving Credit Agreement is approximately 3.74%, which factors a base rate range of 19 basis points to 30 basis points plus a spread of 150 basis points. The Company took this action as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of the current uncertainty in the global financial markets from COVID-19. Throughout the term of the Amended Revolving Credit Agreement, the Company can elect to borrow either Alternative Base Rate Borrowings ("ABR Borrowings") or Eurodollar Borrowings. Eurodollar Borrowings bear interest at a variable rate using the LIBOR for such Interest Period plus an applicable margin ranging from 125 basis points to 150 basis points based on the Company’s average availability during the previous fiscal quarter. ABR Borrowings bear interest at a variable rate determined using a base rate equal to the greatest of (i) prime rate, (ii) federal funds rate plus 50 basis points or (iii) one-month LIBOR plus 100 basis points; plus an applicable margin ranging from 25 basis points to 50 basis points based on the average availability during the previous fiscal quarter. Under the terms of the Amended Revolving Credit Agreement, the unutilized commitment fee ranges from 20 basis points to 25 basis points per annum based on the Company's average utilization during the previous fiscal quarter. Term Loan (Prior to Chapter 11 Cases) In connection with the ANN Acquisition, the Company entered into a $1.8 billion variable-rate term loan (the "Term Loan"), which was issued at a 2% discount and provides for an incremental term facility of $200 million. The Company would also be eligible to borrow an unlimited amount, if it were to maintain a minimum senior secured leverage ratio as defined in the Term Loan (the "Senior Secured Leverage Ratio") among other requirements. The Term Loan matures on August 21, 2022 and its terms require quarterly repayments of $4.5 million during the first half of Fiscal 2017 and $22.5 million thereafter, with a remaining balloon payment of approximately $1.2 billion required at maturity. During Fiscal 2018, the Company made repayments totaling $225 million of which $180.0 million was applied to future quarterly scheduled payments such that the Company is not required to make its next quarterly payment of $22.5 million until November of calendar 2020. In July 2020, the Company used the cash proceeds from the sale of its corporate campus in Mahwah, New Jersey to make a prepayment of $20.4 million. The Company is also required to make mandatory prepayments in connection with certain prepayment events, including (i) commencing with the fiscal year ending July 29, 2017 if the Company has excess cash flow, as defined in the Term Loan, for any fiscal year and the Senior Secured Leverage Ratio for such fiscal year exceeds certain predetermined limits and (ii) from Net Proceeds, as defined in the Term Loan, of asset dispositions and certain casualty events that are greater than $25 million in the aggregate in any fiscal year and not reinvested (or committed to be reinvested) within one year, in each case subject to certain conditions and exceptions. No such mandatory prepayments are due for Fiscal 2020. The Company has the right to prepay the Term Loan in any amount and at any time with no prepayment penalties. At the time of initial borrowings and renewal periods throughout the term of the Term Loan, the Company may elect to borrow either ABR Borrowings or Eurodollar Borrowings. Eurodollar Borrowings bear interest at a variable rate using LIBOR (subject to a 75 basis points floor) plus an applicable margin of 450 basis points. ABR Borrowings bear interest at a variable rate determined using a base rate (subject to a 175 basis points floor) equal to the greatest of (i) prime rate, (ii) federal funds rate plus 50 basis points or (iii) one-month LIBOR plus 100 basis points, plus an applicable margin of 350 basis points. As of July 23, 2020, borrowings under the Term Loan consisted entirely of Eurodollar Borrowings at a rate of 5.25%. The Company entered into an interest rate swap agreement in March 2019 to mitigate some of the risk associated with the variable rate. Refer to Note 15 for additional information. During the second quarter of Fiscal 2020, the Company repurchased $79.5 million aggregate principal amount of its Term Loan debt in open market transactions for a total purchase price of $49.4 million. The repurchase was settled in the second quarter of Fiscal 2020 and the Company recorded a gain on extinguishment of debt of $28.5 million, net of transaction costs and a write-off of a portion of deferred financing fees. In the third quarter of Fiscal 2020, the Company performed an additional repurchase of $42.0 million of principal amount of debt for a total purchase price of approximately $28.6 million. However, in order to maintain maximum financial flexibility as a result of COVID-19, this additional repurchase has not yet been settled and the underlying debt remains outstanding. Restrictions under the Term Loan and the Amended Revolving Credit Agreement (collectively the "Borrowing Agreements") (Prior to Chapter 11 Cases) Under the Amended Revolving Credit Agreement, the Company is required to maintain a fixed charge coverage ratio, as defined in the Amended Revolving Credit Agreement, of at least 1.00 to 1.00 any time in which the Company is in a covenant period, as defined in the Amended Revolving Credit Agreement (the "Covenant Period"). Such Covenant Period is in effect if Availability is less than the greater of (a) 10% of the Credit Limit (the lesser of total Revolving Commitments and the Borrowing Base) and (b) $37.5 million for three The Borrowing Agreements contain customary negative covenants, subject to negotiated exceptions, on (i) liens and guarantees, (ii) investments, (iii) indebtedness, (iv) significant corporate changes including mergers and acquisitions, (v) dispositions and (vi) restricted payments, cash dividends, stock repurchases and certain other restrictive agreements. The Borrowing Agreements also contain customary events of default, such as payment defaults, cross-defaults to certain material indebtedness, bankruptcy and insolvency, the occurrence of a defined change in control, or the failure to observe the negative covenants and other covenants related to the operation of the Company’s business, in each case subject to customary grace periods. The Company's Amended Revolving Credit Agreement allows us to make restricted payments, including dividends and share repurchases, subject to the Company satisfying certain conditions set forth in the Company's Amended Revolving Credit Agreement, notably that at the time of and immediately after giving effect to the restricted payment, (i) there is no default or event of default, and (ii) Availability is not less than the greater of 20% of the aggregate revolving commitments. The Company's Term Loan allows us to make restricted payments, including dividends and share repurchases, up to a predetermined dollar amount. The dollar amount limitation is waived upon the satisfaction of certain conditions under the Term Loan, notably that at the time of and immediately after giving effect to such restricted payment, (i) there is no default or event of default, and (ii) the total leverage ratio, as defined in the Term Loan agreement, is below predetermined limits. Dividends are payable when declared by our Board of Directors. The Company’s obligations under the Borrowing Agreements are guaranteed by certain of its domestic subsidiaries (the “Subsidiary Guarantors”). As collateral under the Borrowing Agreements and the guarantees thereof, the Company and the Subsidiary Guarantors have granted to the administrative agents for the benefit of the lenders a first priority lien on substantially all of their tangible and intangible assets, including, without limitation, certain domestic inventory and certain material real estate. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Aug. 01, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: August 1, August 3, (millions) Prepaid expenses $ 66.0 $ 118.4 Accounts and other receivables (a) 101.4 122.2 Restricted cash 1.2 1.2 Other current assets 0.5 0.5 Total prepaid expenses and other current assets $ 169.1 $ 242.3 ________ (a) Decrease primarily due to the adoption of ASC 842 (see Note 5 for more information) and lower third-party receivables due from maurices for services performed under the agreements described in Note 3. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Aug. 01, 2020 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: August 1, August 3, (millions) Accrued salary, wages and related expenses $ 49.8 $ 99.3 Accrued operating expenses 6.4 126.6 Sales tax payable 9.8 17.8 Income taxes payable 4.0 7.1 Other 0.1 22.5 Total accrued expenses and other current liabilities $ 70.1 $ 273.3 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Aug. 01, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments As discussed in Note 12, the interest rate under the Company's Term Loan is based on a variable rate. Therefore, the Company had exposure to increases in the underlying interest rate. In order to protect against our interest rate exposure, we entered into an interest rate swap agreement in March 2019. We do not hold any derivative financial instruments for speculative or trading purposes. The effective portion of changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in the line item Accumulated other comprehensive loss on the Company’s consolidated balance sheets and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in Accumulated other comprehensive loss related to the Company’s derivative contracts will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Since the Chapter 11 Cases represent an event of default as defined under the terms of the Company’s interest rate swap agreement discussed in Note 12, the counterparty terminated the swap agreement on July 23, 2020. As a result of the termination, the fair value of $8.7 million, which was recorded as a deferred loss within Accumulated other comprehensive loss, was recognized in the Company’s consolidated statement of operations in the fourth quarter of Fiscal 2020. In addition, a termination payment of $7.3 million was expected to be paid in the first quarter of Fiscal 2021. The interest rate swap was recorded at its estimated fair value of $6.3 million as of August 3, 2019 based on Level 2 measurements. Amounts included in the consolidated balance sheet as of August 3, 2019 include $3.1 million in Accrued expenses and other current liabilities and $3.2 million in Other non-current liabilities. The amount of unrealized losses deferred to Accumulated other comprehensive loss before the effect of taxes was $6.3 million as of August 3, 2019. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Aug. 01, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the lowest level of inputs used that are significant to the fair value measurement as of the measurement date as follows: Level 1 Quoted prices for identical instruments in active markets; Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are recently traded (not active); model-derived valuations whose inputs are observable or whose significant value drivers are observable; and Level 3 Instruments with little, if any, market activity are valued using significant unobservable inputs or valuation techniques. Fair Value Measurements of Financial Instruments As of August 1, 2020 and August 3, 2019, the Company believes that the carrying values of cash, cash equivalents and revolving credit facility approximates its fair value based on Level 1 measurements. The fair value of the Term Loan was determined to be $305.2 million as of August 1, 2020 and $850.3 million as of August 3, 2019 based on quoted market prices from recent transactions, which are considered Level 2 inputs within the fair value hierarchy. Fair Value Measurements of Long-lived Assets Measured on a non-Recurring Basis As more fully described in Note 8 and Note 10, during Fiscal 2020, store and corporate assets of $217.4 million and operating lease right-of-use assets of $258.2 million related to 1,924 underperforming stores and two office building were written-down to their estimated fair values of $49.2 million of store and corporate assets and $107.1 million of right-of-use assets, resulting in impairment charges of $168.2 million in store and corporate assets and $151.1 million in right-of-use assets. None of these amounts related to our discontinued operations in Fiscal 2020. In Fiscal 2019, assets of $145.5 million related to 649 under-performing stores and two corporate buildings were written down to their estimated fair values of $60.2 million, resulting in total impairment charges of $85.3 million. Of these amounts, assets of $28.6 million related to 421 under-performing stores were written-down to their estimated fair values of $10.0 million resulting in impairment charges of $18.6 million related to discontinued operations. Key assumptions used to determine fair values were future cash flows including, among other things, expected future operating performance, changes in economic conditions as well as other market information obtained from brokers. Significant inputs related to valuing the store-related assets are classified as Level 3 in the fair value measurement hierarchy. For further discussion of the determination of fair values of goodwill and other intangible assets, see Note 7. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 01, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Taxes on Income Domestic and foreign pretax (loss) income from continuing operations is as follows: Fiscal Years Ended August 1, August 3, (millions) Domestic $ (1,152.7) $ (795.0) Foreign (42.8) 53.5 Total loss before (provision) benefit for income taxes and income (loss) from equity method investment $ (1,195.5) $ (741.5) The (provision) benefit for current and deferred income taxes is as follows: Fiscal Years Ended August 1, August 3, Current: (millions) Federal $ 7.1 $ — State and local (1.6) (4.0) Foreign (6.7) (8.9) (1.2) (12.9) Deferred: Federal (8.1) 30.9 State and local (2.0) 5.5 Foreign (2.4) 0.4 (12.5) 36.8 Total (provision) benefit for income taxes $ (13.7) $ 23.9 The Company's net income tax expense in Fiscal 2020 was unfavorably impacted by certain non-routine, discrete items, including an increase of its valuation allowance for U.S. Federal and state and foreign jurisdictions. The Company has evaluated the available positive and negative evidence and has concluded that, for some of its deferred tax assets, it is more likely than not that it will not be realized in the foreseeable future. A valuation allowance is a non-cash charge, which does not eliminate the deferred tax asset but instead reduces the benefit expected to be realized from it in the future. The SEC staff issued Staff Accounting Bulletin Number 118 ("SAB 118"), which is also included in FASB ASU 2018-05, and provided guidance on accounting for the tax effects of the 2017 Tax Cuts and Jobs Act (the "2017 Act"). SAB 118 allows for a measurement period that should not extend beyond one year from the 2017 Act enactment date of December 22, 2017 for companies to complete the accounting under Accounting Standards Codification Topic 740, “Income Taxes” ("ASC 740"). The Company completed its accounting for the impact of the 2017 Act during the second quarter of Fiscal 2019 and increased its Fiscal 2018 estimate of the one-time federal and state transition tax by $2.3 million to $26.9 million and by $0.2 million to $0.9 million, respectively. The 2017 Act subjects the Company to a new minimum tax on global intangible low-taxed income (“GILTI”) earned by foreign subsidiaries for taxable years beginning after December 31, 2017. Accordingly, the Company has made an accounting policy election to treat GILTI taxes as a current period expense and has made a reasonable estimate of the impact of GILTI which is included in its effective tax rate. Tax Benefits Preservation Plan On May 26, 2020, the Company adopted a Tax Benefits Preservation Plan (the “Plan”) as a measure to protect its existing net operating loss carryforwards and other tax benefits (“Tax Attributes”). Use of any Tax Attributes will be substantially limited if the Company experiences an “ownership change” as defined in Section 382 of the Internal Revenue Code (“Section 382”). For example, the Company’s ability to use its NOLs may become subject to limitation or may be reduced or eliminated in connection with the Chapter 11 Cases. While the Plan is in effect, any person or group that acquires beneficial ownership of 4.9% or more of the Company’s common stock then outstanding without approval from the Board or without meeting certain customary exceptions would be subject to significant dilution in their ownership interest in the Company. Stockholders who currently own 4.9% or more of the Company’s outstanding common stock will not trigger the Plan unless they acquire 0.5% or more additional shares of common stock. Pursuant to the Plan, one right will be distributed to the Company’s stockholders of record for each share of common stock owned at the close of business on June 5, 2020. Each Right would initially represent the right to purchase from the Company one one-thousandth of a share of our Series A Junior Participating Preferred Stock, par value $0.01 (the “Preferred Stock”) at a purchase price of $6.30 per one one-thousandth of a share. The preferred stock will entitle the holder to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of preferred stock. The Board may redeem the rights in whole, but not in part, for $0.001 per right (subject to adjustment) at any time prior to the close of business on the tenth business day after the first date of public announcement that any person or group has triggered the Plan. The rights will expire on the earliest of (i) the close of business on May 25, 2021, (ii) t he time at which the rights are redeemed or exchanged, (iii) the time at which the Board determines that the Tax Attributes are fully utilized, expired, no longer necessary or become limited under Section 382, or (iv) the beginning of the taxable year to which the Board determines no Tax Benefits may be carried forward . Coronavirus Aid, Relief, and Economic Security Act The CARES Act provides relief from certain requirements under U.S. GAAP and contains several corporate income tax provisions, including making remaining AMT credits immediately refundable; providing a 5-year carryback of net operating losses (“NOLs”) generated in tax years 2018, 2019, and 2020, and removing the 80% taxable income limitation on utilization of those NOLs if carried back to prior tax years or utilized in tax years beginning before 2021; and temporarily liberalizing the interest deductibility rules under Section 163(j) of the Internal Revenue Code, by raising the adjusted taxable income limitation from 30% to 50% for tax years 2019 and 2020 and giving taxpayers the election of using 2019 adjusted taxable income for purposes of computing 2020 interest deductibility. The CARES Act did not have a material impact to the Company’s financial condition or results of operation for the twelve months ended August 1, 2020. The Company has requested a $1.4 million refundable AMT Credit and plans to defer the timing of payroll taxes as permitted by the CARES Act. Effective Tax Rate The Company’s effective tax rate is reflective of the jurisdictions where the Company has operations. The effective tax rate for Fiscal 2020 was (1.1)%. The effective tax rate was impacted primarily by a valuation allowance on the Company’s net Federal and state deferred tax asset ("DTA") and a non-deductible impairment to goodwill. In Fiscal 2019 based on the Company's financial performance, the Company determined it was appropriate to record a valuation allowance on its net Federal and state DTAs. This tax expense during Fiscal 2019 was $99.2 million. As of August 3, 2019, the Company had a $122.6 million valuation allowance against the aggregate carrying value of its deferred tax assets. Such valuation allowance provides for the uncertainty that a portion of the recognized deferred tax assets may not be realizable. The valuation allowance increased by $270.8 million in Fiscal 2020 to $393.4 million as of August 1, 2020. Tax Rate Reconciliation The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes provided are as set forth below: Fiscal Years Ended August 1, August 3, (millions) Benefit for income taxes at the U.S. federal statutory rate (a) $ 250.5 $ 158.3 Increase (decrease) due to: State and local income taxes, net of federal benefit 47.9 18.6 Foreign rate differential 3.0 2.8 Tax Cuts and Job Act — — Federal valuation allowance (217.3) (65.3) State valuation allowance (51.5) (14.5) Share-based compensation (5.7) (3.1) Goodwill impairment (31.3) (57.9) Net change relating to uncertain income tax benefits 2.2 (2.5) GILTI (3.8) (7.7) Other – net (7.7) (4.8) Total (provision) benefit for income taxes $ (13.7) $ 23.9 _______ (a) The Fiscal 2020 benefit of $250.5 million and the Fiscal 2019 benefit of $158.3 million include the $3.1 million and $(11.8) million Income (loss) from equity method investment respectively at the federal statutory tax rate. Tax Incentives In connection with the Company’s relocation of its Dressbarn and corporate offices to New Jersey, as well as the expansion of its distribution centers in Ohio and Indiana, the Company was approved for various state and local tax incentives. In order to receive these incentives, the Company will generally need to meet certain minimum employment or expenditure commitments, as well as comply with periodic reporting requirements. There is currently no future benefit expected as minimum employment commitments may not be met. Approximately $1.7 million was recognized in Fiscal 2020 and $5.9 million in Fiscal 2019. Deferred Taxes Significant components of the Company's net deferred tax asset are as follows: August 1, August 3, Deferred tax assets (a) : (millions) Inventories $ 22.5 $ 15.4 Net operating loss carryforwards and tax credits 212.9 93.8 Operating lease liabilities 201.8 — Section 163(j) capitalized interest 29.2 10.4 Accrued payroll and benefits 33.4 29.8 Share-based compensation 5.2 11.0 Straight-line rent — 34.2 Federal benefit of uncertain tax positions 14.8 24.3 Gift cards and merchandise credits 10.3 9.3 Investments 9.6 6.8 Other 14.8 18.7 Total deferred tax assets 554.5 253.7 Deferred tax liabilities: Depreciation 33.0 43.6 Amortization 30.4 62.8 Right-of-use assets 98.4 — Other 5.0 15.8 Total deferred tax liabilities 166.8 122.2 Valuation allowance (393.4) (122.6) Net deferred tax (liability) asset $ (5.7) $ 8.9 _______ (a) Deferred tax asset of $0.7 million is included within Other assets and $6.4 million of deferred tax liabilities is included within Liabilities subject to compromise as of August 1, 2020. Deferred tax asset of $9.4 million is included within Other assets and $0.5 million of deferred tax liabilities is included in Other non-current liabilities as of August 3, 2019. Net Operating Loss Carry Forwards As of August 1, 2020, the Company had U.S. Federal net operating loss carryforwards of $716.6 million and state net operating loss carryforwards of $780.2 million that are available to offset future U.S. Federal and state taxable income. The U.S. Federal net operating losses generated prior to Fiscal 2019 have a twenty one five six ten eleven fifteen sixteen twenty Uncertain Income Tax Benefits Reconciliation of Liabilities A reconciliation of the beginning and ending amounts of unrecognized tax benefits related to continuing operations, excluding interest and penalties, is presented below: Fiscal Years Ended August 1, August 3, (millions) Unrecognized tax benefit beginning balance $ 49.8 $ 50.4 Additions related to tax positions in prior years 1.5 0.9 Reductions related to prior period tax positions (9.8) (0.8) Reductions related to settlements with taxing authorities (1.5) (0.1) Reductions related to expiration of statute of limitations (2.0) (0.6) Unrecognized tax benefit ending balance $ 38.0 $ 49.8 The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. A reconciliation of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for the Company’s continuing operations is presented below: Fiscal Years Ended August 1, August 3, (millions) Accrued interest and penalties beginning balance $ 24.5 $ 21.4 Additions (reductions) charged to expense, net (0.3) 3.1 Accrued interest and penalties ending balance $ 24.2 $ 24.5 The Company’s liability for unrecognized tax benefits (including accrued interest and penalties), which is primarily included in Other non-current liabilities in the accompanying consolidated balance sheets, was $59.5 million as of August 1, 2020 and $71.5 million as of August 3, 2019. Future Changes in Unrecognized Tax Benefits The amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company anticipates that the balance of the liability for unrecognized tax benefits will decrease by approximately $1.0 million during the next twelve months. However, changes in the occurrence, expected outcomes and timing of those events could cause the Company’s current estimate to change materially in the future. The Company’s portion of gross unrecognized tax benefits that would affect its effective tax rate, including interest and penalties, is $44.7 million. The Company files tax returns in the U.S. federal and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to examinations by the relevant tax authorities for years prior to Fiscal 2014. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 01, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Employment Agreements The Company has employment agreements with certain executives in the normal course of business which provide for compensation and certain other benefits. These agreements also provide for severance payments under certain circumstances. Other Commitments The Company enters into various cancelable and non-cancelable commitments during the year. Typically, those commitments are for less than a year in duration and are principally focused on the procurement of inventory and the occasional construction of new retail stores. The Company normally does not maintain any long-term or exclusive commitments or arrangements to purchase merchandise from any single supplier. Preliminary commitments with the Company’s private-label merchandise vendors typically are made five seven In addition, the Company had $99.8 million of outstanding letters of credit as of August 1, 2020. Other Contingencies On July 29, 2019, the Company received a letter from the Listing Qualifications Department staff of The Nasdaq Stock Market (“Nasdaq”), indicating that, based upon the closing bid price of the Company’s common stock for the last 30 consecutive business days, the Company no longer meets the requirement of The Nasdaq Global Select Market to maintain a minimum bid price of $1 per share. Following the approval of the reverse stock split by the Company’s stockholders at the Company’s annual meeting of stockholders, on December 19, 2019, the Company announced that the Board approved a reverse stock split of the Company’s common stock at a ratio of 1-for-20, in order to regain compliance. On January 6, 2020, the Company received written notice from the Listing Qualifications Department staff of Nasdaq stating that because the Company’s shares of common stock had a closing bid price at or above $1 per share for a minimum of ten consecutive business days, the Company’s stock had regained compliance with the minimum bid price requirement for continued listing on The Nasdaq Global Select Market as set forth in Nasdaq Listing Rule 5450(a)(1), and the matter is now closed. Refer to Note 19 for additional information on the reverse stock split. to Note 2 for more information. Legal Proceedings Chapter 11 Cases On July 23, 2020, the Debtors filed the Chapter 11 Cases seeking relief under the Bankruptcy Code. Subject to certain exceptions under the Bankruptcy Code, the filing of the Chapter 11 Cases also automatically stayed, pursuant to Section 362(a) of the Bankruptcy Code, the filing or the continuation of most legal proceedings and other actions against or on behalf of the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Debtors’ bankruptcy estates, unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim. See Note 2 for more information about the Chapter 11 Cases. Federal Securities Class Action On June 7, 2019, plaintiff James Newman commenced a federal securities class action in the United States District Court for the District of New Jersey, naming Ascena Retail Group, Inc. and certain of ascena’s current and former officers and directors as defendants. The Newman complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 related to the Company’s goodwill impairment accounting and statements regarding the success of the 2015 purchase of ANN and the overall performance and expected growth of the ANN brands. Plaintiff seeks damages on behalf of a proposed class of purchasers of ascena securities between September 16, 2015 and June 8, 2017 (the proposed “Class Period”). On July 2, 2019, a second lawsuit was filed by Michaella Corporation. The Michaella complaint is substantially similar to the Newman complaint. Both the Michaella complaint and the Newman complaint name the same defendants, allege the same proposed Class Period, and challenge the same categories of public statements under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. On August 6, 2019, two potential lead plaintiffs (Joel Patterson and Michaella Corporation) filed motions for appointment as lead plaintiff in the Newman and Michaella actions, and to consolidate both actions. On August 23, 2019, the Court consolidated the two actions as In re Ascena Retail Group, Inc. Sec. Litig. and appointed Patterson and Michaella Corporation as joint lead-plaintiffs (“Lead Plaintiffs”). The Lead Plaintiffs’ filed an amended complaint on November 21, 2019, which shortened the class period. Defendants filed a motion to dismiss the amended complaint on February 7, 2020. The motion has now been fully briefed. However, the Company filed a Notice of Suggestion of Bankruptcy with the Court on July 27, 2020, and on July 28, 2020, the Court issued an order staying the proceedings and administratively terminated the motion to dismiss without prejudice. The motion may be re-filed at a later date. Lead Plaintiffs’ counsel has also filed an objection to Ascena’s bankruptcy plan (the “Plan”) in order to try to preserve the purported class claims against the Company and its officers and directors from any possible release pursuant to the Plan. Given the early state of the matter, we are unable to make a determination at this time as to the likelihood of an unfavorable outcome or to estimate the amount or range of any possible loss. Derivative Actions As previously reported, on August 19, 2019, William Cunningham, an Ascena Retail Group, Inc. shareholder, filed a derivative action purportedly on behalf of ascena, in federal court in Delaware against certain of ascena’s current and former officers and directors. The complaint alleged that the management and the board breached their fiduciary duties by failing to exercise proper oversight of ascena, including by failing to disclose issues regarding the acquisition of ANN, the true condition of the ANN brands purchased in the acquisition, and the timing of certain impairment charges to the value of ANN’s goodwill. The plaintiff sought damages on behalf of ascena for the alleged breaches of fiduciary duty, reforms to the corporate governance and internal procedure to ensure compliance with governance obligations and applicable law, as well as an award to plaintiff of attorneys’ fees and costs incurred in pursuing this action. As previously disclosed, on September 19. 2019, Plaintiff voluntarily dismissed the action. Subsequently, on June 19, 2020 Barkha Shah, an Ascena Retail Group, Inc. shareholder, filed a derivative action, purportedly on behalf of Ascena, in federal court in Delaware against certain of Ascena’s current and former officers and directors. The complaint alleges (1) breach of fiduciary duty by the management and the Board for failing to exercise proper oversight of Ascena, including by failing to disclose issues regarding the acquisition of ANN , the true condition of the ANN brands purchased in the acquisition, the timing of certain impairment charges to the value of ANN ’s goodwill, and by approving certain compensation terms in Mr. Jaffe’s May 1, 2019 Transition and Separation Agreement; (2) unjust enrichment against certain present and former directors for compensation received while supposedly concealing material negative information; and (3) contribution and indemnification in the event Ascena is found liable for federal securities law violations. On July 27, 2020 Ascena filed a Notice of Suggestion of bankruptcy, and the case was subsequently stayed. Defendants believe they have strong defenses to these claims and will respond accordingly. Because the action is purportedly on behalf of Ascena, any recovery in the action would belong to Ascena. Other Litigation The Company is involved in routine litigation arising in the normal course of business. While no assurances can be given as to the ultimate outcome of these matters, in the opinion of management, such litigation is not expected to have a material adverse effect on the Company’s consolidated financial statements. Additionally, due to issues arising from COVID-19, including the temporary closures of our retail stores, we have, among other measures, in order to preserve capital, withheld rent payments on store locations and extended vendor payment terms for orders placed in the ordinary course of business. It is possible that our landlords or other vendors may elect to pursue litigation against the Company related to these payments. If such litigation is pervasive enough, it could result in monetary losses that could be material in the aggregate. |
Equity
Equity | 12 Months Ended |
Aug. 01, 2020 | |
Equity [Abstract] | |
Equity | Equity Common Stock Split On December 19, 2019, the Company announced that the Board has approved a reverse stock split of the Company’s common stock at a ratio of 1-for-20. In addition, there was a corresponding reduction in the number of Company’s authorized shares of common stock following the approval of the reverse stock split by the Company’s stockholders at the Company’s annual meeting of stockholders held on December 10, 2019. The reverse stock split became effective at the close of business on December 18, 2019. The reverse stock split reduced the number of shares of common stock issued and outstanding from approximately 199,444,436 to approximately 9,972,221. The authorized number of shares of common stock has been reduced by a corresponding ratio to 18 million. Capital Stock The Company’s capital stock consists of one class of common stock and one class of preferred stock. There are 18 million shares of common stock authorized to be issued and 5,000 shares of preferred stock authorized to be issued. There are no shares of preferred stock issued or outstanding. Common Stock Repurchase Program In December 2015, the Company’s Board of Directors authorized a $200 million share repurchase program (the “2016 Stock Repurchase Program”). Under the 2016 Stock Repurchase Program, purchases of shares of common stock may be made at the Company’s discretion from time to time, subject to overall business, liquidity, and market conditions. Currently, share repurchases in excess of $100 million are subject to certain restrictions under the terms of the Company's Borrowing Agreements, as more fully described in Note 12. Repurchased shares are retired and treated as authorized but unissued. The excess of repurchase price over the par value of common stock for the repurchased shares is charged entirely to retained earnings. No shares of common stock were repurchased in Fiscal 2020 or Fiscal 2019. Cumulative repurchases under the 2016 Stock Repurchase Program total 0.1 million shares of common stock, which were repurchased at an aggregate cost of $18.6 million and the remaining availability under the 2016 Stock Repurchase Program was approximately $181.4 million at August 1, 2020. Net Loss Per Common Share Basic net loss per common share is computed by dividing the net loss applicable to common shares after preferred dividend requirements, if any, by the weighted-average number of common shares outstanding during the period. Diluted net income per common share adjusts basic net income per common share for the effects of outstanding stock options, restricted stock units and any other potentially dilutive financial instruments, only in the periods in which such effect is dilutive under the treasury stock method. The weighted-average number of common shares outstanding used to calculate basic net loss per common share is reconciled to those shares used in calculating diluted net loss per common share as follows: Fiscal Years Ended August 1, 2020 August 3, 2019 (thousands) Basic 9,994.0 9,874.0 Dilutive effect of stock options, restricted stock and restricted stock units (a) — — Diluted shares 9,994.0 9,874.0 ________ (a) There was no dilutive effect of stock options, restricted stock and restricted stock units for all periods presented as the impact of these items was anti-dilutive because of the Company's net loss incurred during these periods. Options to purchase shares of common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive, and therefore not included in the computation of diluted net loss per common share. In addition, the Company has outstanding restricted stock units that are issuable only upon the achievement of certain service conditions. Any performance or market-based restricted stock units outstanding are included in the computation of diluted shares only to the extent the underlying performance or market conditions (a) are satisfied prior to the end of the reporting period or (b) would be satisfied if the end of the reporting period was the end of the related contingency period, and the result would be dilutive under the treasury stock method. Potentially dilutive instruments are not included in the computation of net loss per share for Fiscal 2020 and Fiscal 2019 as the impact of those items would have been anti-dilutive due to the net loss incurred for these periods. For Fiscal 2020 and Fiscal 2019, respectively, 1.0 million and 1.2 million shares of anti-dilutive options and restricted stock units were excluded from the diluted share calculations. Dividends The Company has never declared or paid cash dividends on its common stock. However, payment of dividends is within the discretion of, and are payable only when declared by, the Company’s Board of Directors. Additionally, payments of dividends are limited by the Company's liquidity and borrowing arrangements as described in Note 12. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Aug. 01, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Omnibus Incentive Plan In November 2018, the Board of Directors approved the amendment of the Company's 2016 Omnibus Incentive Plan, as amended and restated on December 10, 2015 (the "2016 Omnibus Incentive Plan"). The amendment to the 2016 Omnibus Incentive plan was approved by the Company's shareholders and became effective on December 14, 2018 to increase the aggregate number of shares that may be issued under the plan by an additional 0.7 million shares to 4.2 million shares of stock-based awards to eligible employees and directors of the Company. The 2016 Omnibus Incentive Plan provides for the granting of service-based and performance-based stock awards as well as performance-based cash incentive awards. The 2016 Omnibus Incentive Plan expires in November 2025. As of August 1, 2020, there were approximately 1.1 million shares remaining under the 2016 Omnibus Incentive Plan available for future grants. The Company issues new shares of common stock when stock option awards are exercised and restricted stock units vest. Impact on Results A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements on a consolidated basis is as follows: Fiscal Years Ended August 1, August 3, (millions) Compensation expense $ 4.3 $ 11.5 Income tax benefit $ — $ 2.4 Stock Options Stock option awards outstanding under the Company’s current plans have been granted at exercise prices that are equal to the market value of its common stock on the date of grant. Such options generally vest over a period of two seven Expected Term — The estimate of expected term is based on the historical exercise behavior of grantees, as well as the contractual life of the option grants. Expected Volatility — The expected volatility factor is based on the historical volatility of the Company's common stock for a period equal to the expected term of the stock option. Risk-free Interest Rate — The risk-free interest rate is determined using the implied yield for a traded zero-coupon U.S. Treasury bond with a term equal to the expected term of the stock option. Expected Dividend Yield — The expected dividend yield is based on the Company's historical practice of not paying dividends on its common stock. The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the fiscal years presented were as follows: Fiscal Years Ended August 1, August 3, Expected term (years) 5.2 5.2 Expected volatility 61.7 % 47.5 % Risk-free interest rate 1.5 % 2.9 % Expected dividend yield — % — % Weighted-average grant date fair value $ 2.74 $ 1.77 A summary of the stock option activity under service-based plans during Fiscal 2020 is as follows: Number of Weighted- Weighted- Aggregate Intrinsic Value (a) (thousands) (years) (millions) Options outstanding – August 3, 2019 850.4 $ 156.00 4.1 $ — Granted 275.9 5.12 Exercised — — Canceled/Forfeited (443.0) 177.66 Options outstanding – August 1, 2020 683.3 $ 81.05 4.6 $ — Options vested and expected to vest at August 1, 2020 (b) 676.6 $ 81.75 4.6 $ — Options exercisable at August 1, 2020 374.2 $ 130.17 3.4 $ — ________ (a) The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. (b) The number of options expected to vest takes into consideration estimated expected forfeitures. As of August 1, 2020, there was $1.0 million of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 0.6 years. The total intrinsic value of options exercised during Fiscal 2020 and Fiscal 2019 was de minimis. The total grant date fair value of options that vested during Fiscal 2020 and, Fiscal 2019, was approximately $6.2 million and $9.6 million, respectively. Market-based Stock Options Market-based non-qualified stock options (“NQSO Awards”) entitle the holder to receive options to purchase shares of common stock of the Company during the vesting period. However, such awards are subject to the grantee’s continuing employment and the Company’s achievement of certain market-based goals over the pre-defined performance period. The Company granted 0.2 million of NQSO Awards during the third quarter of Fiscal 2019 at an exercise price of $23.40 per share. The weighted-average grant date fair value of the awards was $4.40 per share. The NQSO Awards' fair value is determined using a Monte-Carlo simulation model on the grant date. A Monte-Carlo simulation model estimates the fair value of the market-based award based on an expected term of 7 years, a risk-free interest rate of 2.3%, an expected dividend yield of zero and an expected volatility measure of 56.4% for the Company. Compensation expense for NQSOs Awards is recognized over the vesting period regardless of whether the market conditions are expected to be achieved. The total unrecognized compensation cost at August 1, 2020 was $0.6 million to be recognized over 1.75 years. There were no material grants of NQSOs during Fiscal 2020 and there were no vestings of the NQSOs Awards as of August 1, 2020. Restricted Equity Awards The 2010 Stock Plan allowed for the issuance of shares of restricted stock and restricted stock units (“RSUs”) with service-based, market-based and performance-based conditions (collectively, “Restricted Equity Awards”). Under the 2016 Omnibus Incentive Plan, shares of Restricted Equity Awards are issuable with service-based, market-based or performance-based conditions. Any shares of Restricted Equity Awards issued are counted against the shares available for future grant limit as 2.3 shares for every one Restricted Equity Award granted. In general, if options are canceled for any reason or expire, the shares covered by such options again become available for grant. If a share of restricted stock or a RSU is forfeited for any reason, 2.3 shares become available for grant. Service-based Restricted Equity Awards entitle the holder to receive unrestricted shares of common stock of the Company at the end of a vesting period, subject to the grantee’s continuing employment. Service-based Restricted Equity Awards generally vest over a three four The fair values of service-based Restricted Equity Awards are based on the fair value of the Company’s unrestricted common stock at the date of grant. Compensation expense for service-based Restricted Equity Awards is recognized over the vesting period based on the grant-date fair values of the awards that are expected to vest based upon the service and performance-based conditions. A summary of Service-based Restricted Equity Awards activity during Fiscal 2020 is as follows: Service-based Number of Weighted- (thousands) Nonvested at August 3, 2019 67.4 $ 91.42 Granted — — Vested (54.2) 82.58 Canceled/Forfeited (7.8) 88.68 Nonvested at August 1, 2020 5.4 $ 183.84 As of August 1, 2020, there was $0.1 million of total unrecognized compensation cost related to the service-based Restricted Equity Awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.2 years. The total fair value of the service-based Restricted Equity Awards vested during Fiscal 2020 and Fiscal 2019 was $0.3 million and $5.6 million, respectively. The weighted-average grant-date fair value per share of the service-based Restricted Equity Awards granted during Fiscal 2019 was $75.00, respectively. Market-based Restricted Equity Awards Market-based Restricted Equity Awards entitle the holder to receive shares of common stock of the Company during the vesting period. However, such awards are subject to the grantee’s continuing employment and the Company’s achievement of certain market-based goals over the pre-defined performance period. The market-based Restricted Equity Awards fair value is determined using a Monte-Carlo simulation model on the grant date. A Monte-Carlo simulation model estimates the fair value of the market-based award based on an expected term of 3 years, a risk-free interest rate of 2.3%, an expected dividend yield of zero and an expected volatility measure of 74.2% for the Company. Compensation expense for market-based Restricted Equity Awards is recognized over the vesting period regardless of whether the market conditions are expected to be achieved. The Company granted approximately 0.1 million of market-based Restricted Equity Awards during the third quarter ended May 4, 2019. The weighted-average grant day fair value of the awards was $9.35 per share. The total unrecognized compensation at August 1, 2020 was $0.8 million to be recognized over 1.8 years. There were no vestings of the market-based Restricted Equity Awards as of August 1, 2020. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Aug. 01, 2020 | |
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Long-Term Incentive Plans During Fiscal 2016, the Company created a long-term incentive program ("LTIP") for vice presidents and above under the 2016 Omnibus Incentive Plan. The LTIP entitles the holder to either a cash payment, or a stock payment for certain officers at the Company's option, equal to a predetermined target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over a one or three-year performance period. Compensation expense for the LTIP is recognized over the related performance periods based on the expected achievement of the performance goals. In June 2020, the Company announced that it was accelerating payment under its currently active LTIP plans, for which the pre-established targets have already been met. After the June 2020 payout, expense associated with those portions of the LTIP plans where the pre-established targets were not met reversed in the fourth quarter of Fiscal 2020. As a result of the payout, the Company recorded a reversal of expense of approximately $4.5 million to reflect the differential between the amount accrued as of the end of the third quarter and the amount actually paid in the fourth quarter. Accordingly, there was no liability outstanding as of the end of Fiscal 2020 associated with its LTIP plans. The Company recognized $(5.9) million and $0.1 million in compensation expense under the LTIP during Fiscal 2020 and Fiscal 2019, respectively, which was recorded within Selling, general and administrative expenses in the accompanying consolidated financial statements. Retirement Savings Plan (401(k)) The Company currently sponsors a defined contribution retirement savings plan (the "401(k)" plan). This plan covers substantially all eligible U.S. employees. Participating employees may contribute a percentage of their annual compensation, subject to certain limitations under the U.S. Internal Revenue Code. The Company's contribution is made in accordance with a matching formula established prior to the beginning of each plan year. Effective with the plan year started January 1, 2015, the Company contributes a matching amount based on eligible salary contributed by an employee equal to 100% of the first 3% contributed and 50% of the next 2% contributed. Under the terms of the plan, such matching contributions are immediately vested. The Company incurred expenses relating to its contributions to and administration of its 401(k) plan of $8.0 million in Fiscal 2020 and $15.3 million in Fiscal 2019. Of these amounts, $0.5 million and $3.1 million were recorded in discontinued operations in Fiscal 2020 and Fiscal 2019, respectively. The decrease in the retirement savings plan expense in Fiscal 2020 compared to the prior year is primarily due to the temporary suspension of the matching contribution in response to COVID-19, the wind down of the Dressbarn brand that was completed in the second quarter of Fiscal 2020 and the sale of maurices in the fourth quarter of Fiscal 2019. Executive Retirement Plan The Company sponsors an Executive Retirement Plan (the “ERP Plan”) for certain officers and key executives. The ERP Plan is a non-qualified deferred compensation plan. The purpose of the ERP Plan is to attract and retain a select group of management and to provide them with an opportunity to defer compensation on a pretax basis above U.S. Internal Revenue Service limitations. ERP Plan balances cannot be rolled over to another qualified plan or IRA upon distribution. Unlike a qualified plan, the Company is not required to pre-fund the benefits payable under the ERP Plan. ERP Plan participants can contribute up to 50% of base salary and 75% of bonuses, before federal and state taxes are calculated. The Company makes a matching contribution to the ERP Plan in the amount of 100% on the first 1% of base salary and bonus salary deferred up to $270,000. The Company makes an additional matching contribution to the ERP Plan in the amount of 100% on the first 5% of base salary and bonus salary deferred in excess of $270,000. Plan participants vest immediately in their voluntary deferrals and are incrementally vested in their employer matching contributions over a five $22.0 million as of August 1, 2020 and $60.5 million as of August 3, 2019. As of August 1, 2020, $2.4 million was classified within Accrued expenses and other current liabilities, $13.8 million was classified within Other non-current liabilities and $5.8 million was classified in Liabilities subject to compromise in the accompanying consolidated balance sheets. As of August 3, 2019, $31.6 million was classified within Accrued expenses and other current liabilities and $28.9 million was classified within Other non-current liabilities in the accompanying consolidated balance sheets. Employee Stock Purchase Plan |
Segment Information
Segment Information | 12 Months Ended |
Aug. 01, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segments The Company's segment reporting structure reflects an approach designed to optimize the operational coordination and resource allocation of its businesses across multiple functional areas including specialty retail, direct channel and licensing. The Company classifies its businesses into three reportable operating segments: Premium Fashion , Plus Fashion and Kids Fashion . Each segment is reviewed by the Company's Chief Executive Officer, who functions as the chief operating decision maker (the "CODM"), and is responsible for reviewing the operating activities, financial results, forecasts and business plans of the segment. Accordingly, the Company's CODM evaluates performance and allocates resources at the segment level. During the third quarter of Fiscal 2019, the Company made revisions to its reportable segments upon the divesting of its maurices business. As a result, the Company removed the maurices business from the Value Fashion segment and reallocated all corporate overhead to the remaining operating segments. In addition, during the second quarter of Fiscal 2020, the Company completed the Dressbarn wind down, which concludes the reporting of the Value Fashion segment. The Company reallocated all corporate overhead to the remaining operating segments. The financial information presented below reflects such changes for all periods presented, including the prior year financial information. The three reportable segments are as follows: • Premium Fashion segment – consists primarily of the specialty retail, outlet and direct channel operations of the Ann Taylor and LOFT brands. • Plus Fashion segment – consists of the specialty retail, outlet and direct channel operations of the Lane Bryant and Catherines brands. • Kids Fashion segment – consists of the specialty retail, outlet, direct channel and licensing operations of the Justice brand. The accounting policies of the Company’s reporting segments are consistent with those described in Notes 4 and 5. All intercompany revenues are eliminated in consolidation. Corporate overhead expenses are allocated to the segments based upon specific usage or other reasonable allocation methods. Certain expenses, including restructuring and other related charges, have not been allocated to the segments, which is consistent with the CODM's evaluation of the segments. Net sales and operating (loss) income for each operating segment are as follows: Fiscal Years Ended August 1, August 3, Net sales: (millions) Premium Fashion $ 1,852.6 $ 2,415.1 Plus Fashion 1,055.9 1,240.5 Kids Fashion 809.6 1,079.1 Total net sales $ 3,718.1 $ 4,734.7 Operating loss (a) : Premium Fashion $ (280.9) $ 35.1 Plus Fashion (90.1) (101.6) Kids Fashion (226.7) (66.8) Unallocated restructuring and other related charges (b) (238.3) (94.1) Unallocated impairment of goodwill (Note 7) (148.9) (276.0) Unallocated impairment of other intangible assets (Note 7) (128.7) (134.9) Total operating loss $ (1,113.6) $ (638.3) ________ (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. (b) Restructuring and other related charges by operating segment are as follows: Fiscal Years Ended August 1, 2020 August 3, 2019 (millions) Cash related charges (1) : Severance and benefit costs: Premium Fashion $ 5.2 $ 3.3 Plus Fashion 8.1 3.5 Kids Fashion 7.9 1.8 Corporate 8.1 7.5 Total Severance and benefit costs 29.3 16.1 Professional fees and other related charges: Plus Fashion 2.4 — Kids Fashion 1.7 — Corporate 15.6 33.1 Total Professional fees and other related charges 19.7 33.1 Total Cash related charges 49.0 49.2 Non-cash charges: Impairment of assets: Premium Fashion 39.7 — Plus Fashion 43.1 — Kids Fashion 106.5 — Corporate — 44.9 Total Non-cash charges 189.3 44.9 Total restructuring and other related charges $ 238.3 $ 94.1 ________ (1) The charges incurred under the Company's cost reduction initiatives are more fully described in Note 8. Depreciation and amortization expense and capital expenditures for each operating segment are as follows: Fiscal Years Ended August 1, August 3, Depreciation and amortization expense (a) : (millions) Premium Fashion $ 112.2 $ 133.9 Plus Fashion 60.3 74.7 Kids Fashion 60.2 71.8 Total depreciation and amortization expense $ 232.7 $ 280.4 Capital expenditures (a) : Premium Fashion $ 25.4 $ 28.6 Plus Fashion 4.0 8.5 Kids Fashion 9.1 6.1 Corporate (b) 26.4 85.9 Total capital expenditures $ 64.9 $ 129.1 ________ (a) Depreciation and amortization expense and capital expenditures related to the maurices and Dressbarn businesses, historically reported within the Value Fashion segment, were excluded from the tables and is classified as discontinued operations within the consolidated financial statements. Refer to Note 3. (b) Includes capital expenditures for technology and supply chain infrastructure. The Company’s executive team does not regularly review asset information by operating segment and, as a result, we do not report asset information by operating segment. In addition, the Company’s operations are largely concentrated in the United States and Canada. Accordingly, net sales and long-lived assets by geographic location are not meaningful at this time. |
Additional Financial Informatio
Additional Financial Information | 12 Months Ended |
Aug. 01, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Financial Information | Additional Financial Information Fiscal Years Ended Cash Interest and Taxes: August 1, August 3, (millions) Cash paid for interest $ 85.0 $ 97.4 Cash paid for income taxes (a) $ 9.7 $ 5.9 _______ (a) Includes a net payment of $0.1 million for Fiscal 2020 and a net refund of $0.1 million for Fiscal 2019 related to the maurices and Dressbarn businesses, which are classified in discontinued operations. Non-cash Transactions Non-cash investing activities of continuing operations include the accrued purchases of fixed assets in the amount of $9.1 million as of August 1, 2020 and $19.3 million as of August 3, 2019. Restricted Cash A reconciliation of cash, cash equivalents and restricted cash in the consolidated balance sheets to the amounts shown on the consolidated statements of cash flows is shown below: Reconciliation of cash, cash equivalents and restricted cash: August 1, August 3, Cash and cash equivalents $ 580.4 $ 323.8 Restricted cash included in other current assets 1.2 1.2 Cash included in discontinued operations — 4.2 Total cash, cash equivalents and restricted cash $ 581.6 $ 329.2 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Aug. 01, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Sale of Catherines In September 2020, following a comprehensive sales process and auction conducted under Section 363 of the U.S. Bankruptcy Code, the Company announced the sale of Catherines ’ intellectual property assets for a base sale price of $40.8 million, subject to adjustment. The transaction closed on October 13, 2020. At closing, the parties entered into a 30-day Transition Services Agreement (the “TSA”) in order to provide for a transition of the e-commerce business. Amounts received under the TSA were not material. Subsequent to the sale, the Company returned $1.1 million based on the final inventory amount and other adjustments. Sale of Justice In November 2020, the Company announced that, following a comprehensive sale process and a competitive auction conducted under Section 363 of the U.S. Bankruptcy Code, the Company sold the intellectual property of its Justice brand and certain other Justice brand assets for total consideration of approximately $71 million and the assumption of certain liabilities. Justice stores will remain open through the holiday season. A wind down of all Justice locations is expected to conclude by the end of the second quarter of Fiscal 2021. The transaction closed on November 23, 2020. Sale of Ann Taylor, LOFT and Lane Bryant On November 26, 2020, the Company, together with certain of its subsidiaries, entered into an asset purchase agreement (the “Sycamore APA”) with Premium Apparel LLC (the “Purchaser”), an affiliate of Sycamore Partners Management, L.P. Pursuant to the Sycamore APA, the Purchaser will acquire assets relating to the Company’s Ann Taylo r, LOFT and Lane Bryant brands pursuant to Section 363 of the Bankruptcy Code for approximately $540.0 million, subject to certain customary purchase price adjustments as set forth in the Sycamore APA (the “Purchase Price”), as well as assume certain related liabilities. Under the Sycamore APA, the Purchaser has committed to offer to employ associates of the Company whose duties are primarily related to the Ann Taylor , LOFT and Lane Bryant brands or the Company’s corporate functions, in each case who meet certain conditions set forth therein. The consummation of the transactions contemplated by the Sycamore APA (the “Sycamore Sale”) is subject to specified closing conditions, including approval of the Bankruptcy Court. The Sycamore APA contains certain customary termination rights for the Sellers and the Purchaser. In certain circumstances, including approval by the Bankruptcy Court of an Alternative Transaction (as defined in the Sycamore APA), upon termination, the Company will be obligated to pay the Purchaser a termination fee of $16.2 million and reimburse the Purchaser for up to $5.4 million of expenses incurred in connection with the Sycamore APA. In addition, if the Sycamore APA is terminated by the Company for certain Purchaser breaches, including because the Purchaser does not complete the Sycamore Sale in breach of the Sycamore APA, the Company will be entitled to receive a termination fee of $54.0 million. |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Policies) | 12 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. |
Fiscal Year | Fiscal Year |
Common Stock Split | Common Stock Split On December 19, 2019, the Company announced that the Board of Directors (the “Board”) has approved a reverse stock split of the Company’s common stock at a ratio of 1-for-20. Refer to Note 19 for additional information. As a result, the applicable equity and shares information related to prior periods has been restated to reflect this reverse stock split. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Bankruptcy Accounting | The Consolidated Financial Statements have been prepared as if we were a going concern and in accordance with Accounting Standards Codification Topic 852, Reorganizations (“ASC 852”). ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, realized gains and losses and provisions for losses that are realized or incurred during the Chapter 11 Cases, including adjustments to the carrying value of certain indebtedness are recorded as “Reorganization items” in the Consolidated Statements of Operations. In addition, prepetition obligations that may be impacted by the Chapter 11 Cases have been classified as “Liabilities subject to compromise” on the Consolidated Balance Sheets at August 1, 2020. These liabilities may be settled for less depending on the claim amounts allowed by the Bankruptcy Court. |
Revenue Recognition | Effective August 5, 2018, the Company adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers,” ("ASU 2014-09"). For retail sales, the performance obligation is the transfer of retail merchandise to the customer at the retail store or at the time of delivery to the customer. Retail store revenue is recognized net of estimated returns at the time of sale to consumers. Direct channel revenue from sales of products ordered through the Company’s retail internet sites is recognized upon delivery and receipt of the shipment by our customers. Such revenue is reduced by an estimate of returns. The Company accounts for sales and other related taxes on a net basis, thereby excluding such taxes from revenue. Reserves for estimated product returns are recorded based on historical return trends and are adjusted for known events, as applicable. As of August 1, 2020, the liability for estimated returns was approximately $14.0 million and the corresponding balance of the right of return asset for merchandise was approximately $7.9 million. There was no liability for estimated returns related to discontinued operations at the end of Fiscal 2020. As of August 3, 2019, the liability for estimated returns was approximately $19.9 million, of which $2.1 million was included in Liabilities related to discontinued operations, and the corresponding balance of the right of return assets for merchandise was approximately $9.7 million. The contract liabilities representing unearned revenue for our continuing operations are as follows: August 1, 2020 August 3, 2019 (millions) Deferred revenue - gift card liability $ 78.4 $ 79.7 Deferred revenue - loyalty programs 21.0 22.1 Gift cards, gift certificates and merchandise credits (collectively, “gift cards”) issued by the Company are recorded as a deferred income liability until they are redeemed, at which point revenue is recognized. Gift cards do not have expiration dates. A substantial majority of all gift cards are redeemed within a 12-month period with the highest redemption period occurring in the same quarter the card was issued. The Company recognizes income for unredeemed gift cards when the likelihood of a gift card being redeemed by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Gift card breakage is recognized in Net sales over time based on the historical redemption patterns and historically has not been material. The Company recognized revenue of approximately $38 million and $39 million in Fiscal 2020 and Fiscal 2019, respectively, associated with gift card redemptions and gift card breakage. Of these amounts, approximately $6 million and $12 million, respectively, were recorded within Income from discontinued operations. Revenue associated with merchandise shipments to other third-party retailers is recognized at the time title passes and risk of loss is transferred to customers, which generally occurs at the date of shipment. In addition to retail-store, direct channel and third-party sales, the Company's segments recognize revenue from (i) licensing arrangements with franchised stores, (ii) royalty payments received under license agreements for the use of their trade name and (iii) credit card agreements as it is earned in accordance with the terms of the underlying agreements. The Company offers numerous customer loyalty programs for participating customers based on their level of purchases. For every qualifying purchase, the Company defers a portion of the revenue until the loyalty points are redeemed. The transaction price is allocated between the product and the loyalty points based on the relative stand-alone selling price. Loyalty points accumulate until predetermined thresholds are met at which point the loyalty points can be redeemed as a discount off of a future purchase. Substantially all loyalty points are redeemed within a 12-month period. The Company recognized revenue of approximately $24 million and $33 million in Fiscal 2020 and Fiscal 2019, respectively, associated with reward redemptions and breakage related to the Company’s loyalty programs. Of these amounts, approximately $5 million and $9 million, respectively, was recorded within Income from discontinued operations. The Company’s revenues by major product categories as a percentage of total net sales are as follows: Fiscal Years Ended August 1, August 3, Apparel 83 % 82 % Accessories 12 % 13 % Other 5 % 5 % Total net sales 100 % 100 % |
Cost of Goods Sold | Cost of goods sold (“COGS”) consists of all costs of merchandise (net of purchase discounts and vendor allowances), merchandise acquisition costs (primarily commissions and import fees) and freight to our distribution centers and stores. These costs are determined to be directly or indirectly incurred in bringing an article to its existing condition and location. Additionally, the direct costs associated with shipping goods to customers and adjustments to the carrying value of inventory related to realizability and shrinkage are recorded as components of COGS. |
Buying, Distribution and Occupancy Expenses | Buying, distribution and occupancy expenses ("BD&O expenses") consist of store occupancy and utility costs, fulfillment expense (as defined below) and all costs associated with the buying and distribution functions (excluding depreciation). |
Selling, General and Administrative Expenses | Selling, general and administrative expenses (“SG&A expenses”) consist of compensation and benefit-related costs for sales and store operations personnel, administrative personnel and other employees not associated with the functions described above under BD&O expenses. SG&A expenses also include advertising and marketing costs, information technology and communication costs, supplies for our stores and administrative facilities, insurance costs, legal costs and costs related to other administrative services. |
Restructuring and Other Related Charges | Restructuring and other related charges consist of severance and benefit costs, long-lived asset impairment charges and professional fees incurred in connection with identification and implementation of the cost reduction initiatives, the Dressbarn |
Shipping and Fulfillment | Shipping and fulfillment fees billed to customers are recorded as revenue. The direct costs associated with shipping goods to customers are recorded as a component of COGS. Costs associated with preparing the merchandise for shipping, such as picking, packing, warehousing and order charges ("fulfillment expense") are recorded as a component of BD&O expenses. Fulfillment expense was approximately $57.7 million in Fiscal 2020 and $65.3 million in Fiscal 2019, of which $1.2 million for Fiscal 2020 and $10.7 million for Fiscal 2019 was recorded within Income from discontinued operations. |
Marketing and Advertising Costs | Marketing and advertising costs are included in SG&A expenses. Marketing and advertising costs are expensed when the advertisement is first exhibited. Marketing and advertising expenses were $184.6 million for Fiscal 2020 and $265.1 million for Fiscal 2019, of which $6.9 million for Fiscal 2020 and $59.9 million for Fiscal 2019 was recorded within Income from discontinued operations. Deferred marketing and advertising costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were not material at the end of either Fiscal 2020 or Fiscal 2019. |
Foreign Currency Transactions and Translations | The operating results and financial position of foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. The resulting translation gains or losses are included in the consolidated statements of comprehensive loss, and in the consolidated statements of equity as a component of accumulated other comprehensive loss (“AOCL”). Gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature also are included within AOCL. The Company recognizes gains and losses on transactions that are denominated in a currency other than the respective entity's functional currency. Foreign currency transaction gains and losses also result from intercompany loans made to foreign subsidiaries that are not of a long-term investment nature and include amounts realized on the settlement of certain intercompany loans with foreign subsidiaries. Net losses from foreign currency transactions were $0.4 million in Fiscal 2020 and $0.7 million in Fiscal 2019, of which losses of $0.1 million for Fiscal 2019 were recorded within Income from discontinued operations. Such amounts are recognized in earnings and included within Interest income and other income, net in the accompanying consolidated statements of operations. |
Stock-based Compensation and Cash Long-Term Incentive Plans | The Company expenses stock-based compensation to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. The Company uses the Black-Scholes valuation method to determine the grant date fair value of its service-based option compensation and a Monte Carlo simulation model to determine the grant date fair value of its market and performance-based option compensation. Shares of restricted stock and restricted stock units are issuable with service-based, market-based or performance-based conditions (collectively, “Restricted Equity Awards”). Compensation expense for Restricted Equity Awards is recognized over the vesting period based on the grant-date fair values of the awards that are expected to vest based upon the service, market and performance-based conditions. Long-Term Incentive Plans The Company maintains a long-term cash incentive program ("LTIP") which entitles the holder to a cash payment equal to a target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance goals over a three |
Cash and Cash Equivalents | Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less and receivables from financial institutions related to credit card purchases due to the high-credit quality and short time frame for settlement of the outstanding amounts. |
Concentration of Credit Risk | The Company maintains cash deposits and cash equivalents with well-known and stable financial institutions; however, there were significant amounts of cash and cash equivalents on deposit at overseas financial institutions as well as at financial institutions that were in excess of FDIC-insured limits at August 1, 2020. |
Inventories | Retail Inventory Method We hold inventory for sale through our retail stores and direct channel sites. The Company’s Plus Fashion and Kids Fashion segments use the retail inventory method of accounting, under which inventory is stated at the lower of cost, on a First In, First Out (“FIFO”) basis, or market. Under the retail inventory method, the valuation of inventory at cost and the resulting gross margin are calculated by applying a calculated cost to retail ratio to the retail value of inventory. Inherent in the retail method are certain significant management judgments and estimates including, among others, initial merchandise markup, markdowns and shrinkage, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to a number of quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and mix of products in inventory, as well as changes in consumer preferences, market and economic conditions. The Company’s historical estimates of these costs and its markdown provisions have not differed materially from actual results. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. Weighted-average Cost Method Our Premium Fashion segment uses the weighted-average cost method to value inventory, under which inventory is valued at the lower of average cost or net realizable value. Inventory cost is adjusted when the current selling price or future estimated selling price is less than cost. |
Property and Equipment, net | Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Buildings and improvements 5-40 years Distribution center equipment and machinery 3-20 years Leasehold improvements Shorter of the useful life or expected term of the lease Furniture, fixtures, and equipment 2-10 years Information technology 2-10 years Certain costs associated with computer software developed or obtained for internal use are capitalized, including internal costs. The Company capitalizes certain costs for employees that are directly associated with internal use computer software projects once specific criteria are met. Costs are expensed for preliminary stage activities, training, maintenance and all other post-implementation stage activities as they are incurred. Property and equipment, along with other long-lived assets, such as right-of-use assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. In evaluating long-lived assets for recoverability, including finite-lived intangible assets as described below, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan of disposal are reported at the lower of carrying value or fair value less costs to sell. |
Goodwill and Other Intangible Assets, net | At acquisition, the Company estimates and records the fair value of purchased intangible assets, which primarily consist of certain trade names, customer relationships, favorable leases, proprietary software and franchise rights. The fair value of these intangible assets is estimated based on management's assessment, considering independent third-party appraisals, when necessary. The excess of the purchase consideration over the fair value of net assets acquired is recorded as goodwill. Goodwill and certain other intangible assets deemed to have indefinite useful lives, including trade names and certain franchise rights, are not amortized but assessed for impairment annually, typically during the fourth quarter of each fiscal year, or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable. Such assessment is performed using a quantitative approach at the reporting unit level. In the fourth quarter of Fiscal 2019, the Company determined that several discrete events had occurred which changed the manner in which the business was expected to be managed going forward. The sale of maurices , the announced wind down of the Dressbarn brand, as well as the changes in senior management, including the appointment of a new Chief Operating Decision Maker (“CODM”), all occurred in the same period. After considering the impact of all these changes, the Company concluded that its new management began requesting more discrete operating information related to its Ann Taylor and LOFT businesses, which are components of the Premium Fashion segment. Therefore, since new management, which included the Company's chief operating decision maker, was beginning to look at the components separately, and beginning to make decisions and allocate resources on that basis, the Company concluded that these components meet the definition of separate operating segments. Given that the determination of a reporting unit for purposes of goodwill impairment testing cannot be at a level higher than the operating segment, the Company determined that Ann Taylor and LOFT met the definition of separate operating segments and therefore goodwill has been separately allocated to these two units. A goodwill impairment loss is recognized in an amount equal to the excess of the reporting unit's carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. The impairment test for other indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value. The fair value of indefinite-lived intangible assets is primarily determined using an approach that values the Company’s cash savings from having a royalty-free license compared to the market rate it would pay for access to use the trade name. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to the excess. In addition, in evaluating finite-lived intangible assets for recoverability, we use our best estimate of future cash flows expected to result from the use of the asset and eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value. Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets (as discussed above), are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. Refer to the Company's accounting policy for long-lived asset impairment as described earlier under the caption "Property and Equipment, Net." |
Investments | Accounting Standards Codification (“ASC”) 810—Consolidation (“ASC 810”) requires the consolidation of all entities for which a Company has a controlling voting interest and all variable interest entities (“VIEs”) for which a Company is deemed to be the primary beneficiary. An entity is generally a VIE if it meets any of the following criteria: (i) the entity has insufficient equity to finance its activities without additional subordinated financial support from other parties, (ii) the equity investors cannot make significant decisions about the entity’s operations or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity or receive the expected returns of the entity and substantially all of the entity’s activities involve or are conducted on behalf of the investor with disproportionately few voting rights. For those entities that are not considered VIEs, or are considered VIEs but the Company is not the primary beneficiary, the Company uses either the equity method or the cost method of accounting, depending on a variety of factors as set forth in ASC 323—Investments (“ASC 323”), to account for those investments which are not required to be consolidated under U.S. GAAP. |
Insurance Reserves | The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers’ compensation, general liability and employee healthcare benefits. Liabilities associated with these risks are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Such liabilities are capped through the use of stop-loss contracts with insurance companies. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. As of August 1, 2020 these reserves were $55.1 million and as of August 3, 2019 they were $60.8 million of which $9.6 million and $15.7 million was recorded within Liabilities from discontinued operations as of August 1, 2020 and August 3, 2019, respectively. The Company is subject to various claims and contingencies related to insurance and other matters arising out of the normal course of business. The Company is self-insured for expenses related to its employee medical and dental plans, its workers’ compensation plan and its general liability plan, up to certain thresholds. Claims filed, as well as claims incurred but not reported, are accrued based on management’s estimates, using information received from plan administrators, historical analysis and other relevant data. The Company’s stop-loss insurance coverage limit for individual claims under these policies is $750,000 for medical claims, $500,000 for workers' compensation claims and $150,000 for general liability claims. The Company believes its accruals for claims and contingencies are adequate based on information currently available. However, it is possible that actual results could differ significantly from the recorded accruals for claims and contingencies. |
Income Taxes | Income taxes are provided using the asset and liability method. Under this method, income taxes (i.e., deferred tax assets and liabilities, current taxes payable/refunds receivable and tax expense) are recorded based on amounts refundable or payable in the current year, and include the results of any differences between U.S. GAAP and tax reporting. Deferred income taxes reflect the tax effect of net operating loss, capital loss and general business credit carry forwards and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The Company accounts for the financial effect of changes in tax laws or rates in the period of enactment. Valuation allowances are established when management determines that it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. Tax valuation allowances are analyzed periodically and adjusted as events occur, or circumstances change, that warrant adjustments to those balances. In determining the income tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more-likely-than-not of being sustained upon audit, based solely on the technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. These assessments can be complex and the Company often obtains assistance from external advisors. To the extent that the Company’s estimates change or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. If the initial assessment fails to result in the recognition of a tax benefit, the Company regularly monitors its position and subsequently recognizes the tax benefit if (i) there are changes in tax law or analogous case law that sufficiently raise the likelihood of prevailing on the technical merits of the position to more-likely-than-not, (ii) the statute of limitation expires or (iii) there is a completion of an audit resulting in a settlement of that tax year with the appropriate agency. Uncertain tax positions are classified as current only when the Company expects to pay cash within the next twelve months. Interest and penalties, if any, are recorded within the Benefit (provision) for income taxes in the Company’s accompanying consolidated statements of operations and are classified on the accompanying consolidated balance sheets with the related liability for uncertain tax positions. |
Leases | Effective August 4, 2019, the Company adopted Accounting Standards Update 2016-02, "Leases" ("ASC 842"). Refer to Notes 5 and 6 for more detailed information about the adoption of ASU 2016-02 and the differences between 2016-02 and the prior guidance. |
Voluntary Reorganization (Table
Voluntary Reorganization (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Voluntary Reorganization [Abstract] | |
Liabilities Subject to Compromise Components | The components of liabilities subject to compromise are presented below: August 1, 2020 Liabilities subject to compromise: (millions) Accounts payable $ 417.0 Accrued expenses and other current liabilities 123.0 Current portion of long-term debt (a) 1,252.6 Current portion of lease liabilities 153.9 Lease-related liabilities 626.4 Other non-current liabilities 106.5 Liabilities subject to compromise $ 2,679.4 ____________ (a) See Note 12 for more details of the prepetition debt reported as Liabilities subject to compromise. |
Condensed Balance Sheet | CONDENSED BALANCE SHEET August 1, 2020 (millions) ASSETS Current assets: Cash and cash equivalents $ 553.5 Inventories 342.6 Prepaid expenses, and other current assets 149.4 Current assets related to discontinued operations 3.5 Total current assets 1,049.0 Property and equipment, net 454.1 Operating lease right-of-use assets 377.0 Goodwill 164.6 Other intangible assets, net 20.2 Equity method investment 45.2 Other assets 52.2 Investment in non-debtor subsidiaries 177.3 Total assets $ 2,339.6 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 126.8 Accrued expenses and other current liabilities 63.7 Deferred income 116.9 Current portion of long-term debt 227.9 Current liabilities related to discontinued operations 23.5 Total current liabilities 558.8 Other non-current liabilities 34.3 Non-current liabilities related to discontinued operations 5.9 Amounts due to non-debtor subsidiaries 99.9 Liabilities subject to compromise 2,679.4 Total liabilities 3,378.3 Total equity shareholders' (deficit) equity (1,038.7) Total liabilities and shareholders' (deficit) equity $ 2,339.6 |
Condensed Income Statement | CONDENSED STATEMENT OF OPERATIONS Fiscal Year Ended August 1, 2020 (millions) Net sales $ 3,707.2 Cost of goods sold (1,883.0) Gross margin 1,824.2 Other operating expenses: Buying, distribution and occupancy expenses (814.3) Selling, general and administrative expenses (1,406.6) Restructuring and other related charges (234.3) Impairment of goodwill (148.9) Impairment of other intangible assets (93.2) Depreciation and amortization expenses (230.5) Equity in losses of non-debtor subsidiaries (28.8) Total other operating expenses (2,956.6) Operating loss (1,132.4) Interest expense (99.4) Interest and other income, net 4.5 Gain on extinguishment of debt 28.5 Reorganization items, net (3.4) Loss from continuing operations before provision for income taxes and income from equity method investment (1,202.2) Provision for income taxes from continuing operations (7.0) Income from equity method investment 3.1 Loss from continuing operations (1,206.1) Discontinued operations Income from discontinued operations, net of taxes 64.3 Net loss $ (1,141.8) |
Condensed Cash Flow Statement | CONDENSED STATEMENT OF CASH FLOWS Fiscal Year Ended August 1, 2020 (millions) Cash flows provided by operating activities $ 138.3 Cash flows from investing activities: Capital expenditures (65.1) Proceeds from sale of assets 20.6 Proceeds from the sale of intangible assets 5.0 Cash flows used in investing activities (39.5) Cash flows from financing activities: Redemptions and repayments of term loan (69.8) Proceeds from revolver borrowings 230.0 Proceeds from stock options exercised and employee stock purchases 0.1 Cash flows provided by financing activities 160.3 Increase in cash and cash equivalents 259.1 Cash and cash equivalents, beginning of period 295.6 Cash and cash equivalents, end of period $ 554.7 |
Basis of Presentation Basis o_2
Basis of Presentation Basis of Presentation (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Summary of Discontinued Operations | The following table summarizes the results of Dressbarn reclassified as discontinued operations: Fiscal Years Ended August 1, August 3, (millions) Net sales $ 326.6 $ 758.7 Depreciation and amortization expense (10.9) (19.5) Operating income (loss) 63.9 (43.1) Pretax income (loss) from discontinued operations 64.5 (43.5) Income tax provision (0.2) (9.4) Income (loss) from discontinued operations, net of tax $ 64.3 $ (52.9) The major components of Dressbarn assets and liabilities related to discontinued operations are summarized below: August 1, August 3, (millions) Cash and cash equivalents $ — $ 4.2 Inventories — 57.0 Prepaid expenses and other current assets 3.5 37.0 Property and equipment, net — 11.5 Total assets related to discontinued operations $ 3.5 $ 109.7 Accounts payable and other current liabilities $ 5.5 $ 94.7 Lease-related liabilities — 29.6 Liabilities subject to compromise 19.9 — Other liabilities 4.0 5.9 Total liabilities related to discontinued operations $ 29.4 $ 130.2 The sale was recorded in the fourth quarter of Fiscal 2019 and resulted in a gain of $44.5 million, net of tax, which was recorded as a component of discontinued operations in the accompanying consolidated statement of operations and was calculated as follows: August 3, (millions) Consideration received: Cash $ 209.8 Investment in Viking 53.9 263.7 Less: Net assets of maurices (201.1) Deferred income of transition services contracts (10.0) Transaction costs (6.7) Other related costs (5.4) Gain on disposition of maurices before taxes 40.5 Income tax benefit from the sale of maurices (a) 4.0 Gain on disposition of maurices after taxes $ 44.5 _______ (a) The Company's tax basis in maurices exceeded that of its book basis. As a result, the Company recorded a tax benefit of $4.0 million on the sale in the fourth quarter of Fiscal 2019. The following table summarizes the results of maurices classified as discontinued operations: Fiscal Year Ended August 3, 2019 (a) Net sales $ 749.4 Depreciation and amortization expense (21.2) Operating income 97.7 Pretax income from discontinued operations 98.2 Income tax expense (21.8) Income from discontinued operations, net of tax $ 76.4 _______ (a) Results for the fiscal year ended August 3, 2019 represent results for the period prior to the sale closing on May 6, 2019 and do not reflect the Gain on the disposition of $44.5 million, which is also included under the discontinued operations line in the Company's consolidated statements of operations. The major components of cash flows related to discontinued operations are summarized below: Fiscal Years Ended August 1, August 3, (millions) Cash provided by operating activities of discontinued operations $ 52.6 $ 71.2 Cash provided by (used in) investing activities of discontinued operations 4.9 (6.4) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Schedule of revenue by major product categories | The Company’s revenues by major product categories as a percentage of total net sales are as follows: Fiscal Years Ended August 1, August 3, Apparel 83 % 82 % Accessories 12 % 13 % Other 5 % 5 % Total net sales 100 % 100 % |
Property, Plant and Equipment | Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Buildings and improvements 5-40 years Distribution center equipment and machinery 3-20 years Leasehold improvements Shorter of the useful life or expected term of the lease Furniture, fixtures, and equipment 2-10 years Information technology 2-10 years Property and equipment, net, consist of the following: August 1, August 3, (millions) Property and Equipment: Land $ 13.2 $ 22.5 Buildings and improvements 144.2 194.8 Leasehold improvements 540.2 669.3 Furniture, fixtures and equipment 485.1 497.0 Information technology 790.4 793.8 Construction in progress 4.9 13.6 1,978.0 2,191.0 Less: accumulated depreciation (1,511.7) (1,355.5) Property and equipment, net $ 466.3 $ 835.5 |
Contract with Customer, Asset and Liability | The contract liabilities representing unearned revenue for our continuing operations are as follows: August 1, 2020 August 3, 2019 (millions) Deferred revenue - gift card liability $ 78.4 $ 79.7 Deferred revenue - loyalty programs 21.0 22.1 |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of Impact of ASU 2016-02 | The following table provides the impact of adoption of ASU 2016-02 on the Company’s consolidated balance sheet: August 3, 2019 (as reported under ASC 840) Impact of adoption of ASC 842 August 3, 2019 (as reported under ASC 842) (millions) Assets Prepaid expenses and other current assets $ 242.3 $ (33.6) $ 208.7 Current assets related to discontinued operations 98.2 (7.6) 90.6 Other intangible assets, net 276.6 (8.4) 268.2 Operating lease right-of-use asset — 744.4 744.4 Non-current assets related to discontinued operations 11.5 131.5 143.0 Liabilities and Shareholders’ Equity Current portion of lease liabilities — 141.3 141.3 Current liabilities related to discontinued operations 94.7 37.8 132.5 Lease-related liabilities 204.6 (204.6) — Long-term lease liabilities — 769.1 769.1 Non-current liabilities related to discontinued operations 35.5 94.2 129.7 Accumulated deficit (935.9) (11.5) (947.4) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Leases [Abstract] | |
Lease, Cost | A summary of the Company’s operating lease costs from continuing operations is as follows: Fiscal Year Ended August 1, (millions) Single lease costs (a) $ 368.9 Variable lease costs (b) 201.4 Total lease expenses 570.3 Less rental income (c) (3.9) Total net rental expense (d) $ 566.4 ________ (a) Includes amortization and interest expense associated with operating lease right-of-use assets and liabilities. (b) Includes variable payments related to both lease and non-lease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as month-to-month rent payments while expired store lease contracts are renegotiated. (c) Substantially reflects rental income received related to Company-owned space in Duluth, MN. (d) Total occupancy costs included in discontinued operations related to Dressbarn were $31.8 million for the year ended August 1, 2020. The following table provides a summary of the Company’s operating lease costs from continuing operations for the year ended August 3, 2019, which was accounted for in accordance with Accounting Standards Codification (“ASC”) 840, “Leases” (“ASC 840”). Fiscal Year Ended August 3, (millions) Base rentals $ 395.9 Percentage rentals 26.0 Other occupancy costs, primarily CAM and real estate taxes 171.8 Total (a) $ 593.7 ________ (a) Total occupancy costs included in discontinued operations were $191.5 million for the year ended August 3, 2019. |
Operating leases, weighted average remaining lease terms and discount rate | The weighted-average remaining lease term of the Company’s operating leases and the weighted-average discount rates used to calculate the Company’s operating lease liabilities are as follows: August 1, Weighted-average remaining lease term (years) 5.3 Weighted-average discount rate 25.4% |
Lessee, Operating Lease, Liability, Maturity | The following table provides a maturity analysis of the Company’s operating lease liabilities, based on undiscounted cash flows, as of August 1, 2020: Fiscal Years Minimum Operating Lease Payments (a) (b) (millions) 2021 $ 351.8 2022 287.6 2023 211.7 2024 148.0 2025 101.8 Thereafter 360.4 Total undiscounted operating lease liabilities 1,461.3 Less imputed interest (679.6) Present value of operating lease liabilities 781.7 Less current portion of lease liabilities (0.6) Less long-term lease liabilities (0.8) Total lease liabilities, included in Liabilities subject to compromise (c) $ 780.3 ________ (a) Net of sublease income, which is not expected to be significant in any period. (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. |
Future Minimum Lease Payments Under Noncancelable Operating Leases | As reported under the previous accounting standard, the following table provides a summary of total consolidated operating lease commitments, including leasehold financing obligations, under non-cancelable leases as of August 3, 2019: Fiscal Years Minimum Operating Lease Payments (a) (b) (millions) 2020 $ 462.0 2021 402.3 2022 325.4 2023 242.7 2024 172.6 Thereafter 563.3 Total future minimum rentals $ 2,168.3 ________ (a) Net of sublease income, which is not expected to be significant in any period. (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental disclosures related to leases are as follows: Fiscal Year Ended August 1, (millions) Cash payments arising from operating lease liabilities (included in cash flows from operating activities) $ 265.6 Non-cash operating lease liabilities from obtaining right-of-use assets 4.4 Fiscal Years Ended Cash Interest and Taxes: August 1, August 3, (millions) Cash paid for interest $ 85.0 $ 97.4 Cash paid for income taxes (a) $ 9.7 $ 5.9 _______ (a) Includes a net payment of $0.1 million for Fiscal 2020 and a net refund of $0.1 million for Fiscal 2019 related to the maurices and Dressbarn businesses, which are classified in discontinued operations. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill for each Reportable Segment | The following details the changes in goodwill for each reportable segment: Premium Fashion (a) Plus Fashion (b) Kids Fashion (c) Total (millions) Balance at August 4, 2018 $ 305.0 $ 115.1 $ 169.4 $ 589.5 Impairment losses — (115.1) (160.9) (276.0) Balance at August 3, 2019 305.0 — 8.5 313.5 Impairment losses (140.4) — (8.5) (148.9) Balance at August 1, 2020 $ 164.6 $ — $ — $ 164.6 ________ (a) Net of accumulated impairment losses of $569.3 million and $428.9 million for the Premium Fashion segment of August 1, 2020 and August 3, 2019, respectively. (b) Represents the Plus Fashion segment impairment losses as of August 3, 2019, which $65.8 million and $49.3 million relates to Lane Bryant and Catherines reporting units, respectively. The accumulated impairment loss at the Lane Bryant and Catherines reporting units as of August 1, 2020 and August 3, 2019 was $387.7 million and $49.3 million, respectively. (c) Net of accumulated impairment losses of $169.4 million and $160.9 million for the Kids Fashion |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets, reflecting the change, as well as the impairments discussed below, now consist of the following: August 1, 2020 August 3, 2019 Description Gross Accumulated Net Gross Accumulated Net Intangible assets not subject to amortization : (millions) Brands and trade names (a) $ 134.2 $ — $ 134.2 $ 252.0 $ — $ 252.0 Franchise rights (a) — — — 10.9 — 10.9 Total intangible assets not subject to amortization 134.2 — 134.2 262.9 — 262.9 Intangible assets subject to amortization (b) : Proprietary technology 4.8 (4.8) — 4.8 (4.8) — Customer relationships 52.0 (52.0) — 52.0 (46.7) 5.3 Favorable leases — — — 38.2 (29.8) 8.4 Trade names 5.3 (5.3) — 5.3 (5.3) — Total intangible assets subject to amortization 62.1 (62.1) — 100.3 (86.6) 13.7 Total intangible assets $ 196.3 $ (62.1) $ 134.2 $ 363.2 $ (86.6) $ 276.6 ________ (a) The Company recorded impairment charges related to trade names during Fiscal 2020 and Fiscal 2019, as discussed by reporting unit below. (b) There were no finite-lived intangible asset impairment losses recorded for any of the periods presented. |
Schedule of Finite-Lived Intangible Assets | Other intangible assets, reflecting the change, as well as the impairments discussed below, now consist of the following: August 1, 2020 August 3, 2019 Description Gross Accumulated Net Gross Accumulated Net Intangible assets not subject to amortization : (millions) Brands and trade names (a) $ 134.2 $ — $ 134.2 $ 252.0 $ — $ 252.0 Franchise rights (a) — — — 10.9 — 10.9 Total intangible assets not subject to amortization 134.2 — 134.2 262.9 — 262.9 Intangible assets subject to amortization (b) : Proprietary technology 4.8 (4.8) — 4.8 (4.8) — Customer relationships 52.0 (52.0) — 52.0 (46.7) 5.3 Favorable leases — — — 38.2 (29.8) 8.4 Trade names 5.3 (5.3) — 5.3 (5.3) — Total intangible assets subject to amortization 62.1 (62.1) — 100.3 (86.6) 13.7 Total intangible assets $ 196.3 $ (62.1) $ 134.2 $ 363.2 $ (86.6) $ 276.6 ________ (a) The Company recorded impairment charges related to trade names during Fiscal 2020 and Fiscal 2019, as discussed by reporting unit below. (b) There were no finite-lived intangible asset impairment losses recorded for any of the periods presented. |
Restructuring and Other Relat_2
Restructuring and Other Related Charges (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Charges | As a result of the cost reduction initiatives, the Company incurred the following charges, which are included within Restructuring and other related charges: Fiscal Years Ended August 1, 2020 August 3, 2019 Cash restructuring charges: (millions) Severance and benefit costs (a) $ 29.3 $ 16.1 Other related charges (b) 19.7 33.1 Total cash charges 49.0 49.2 Non-cash charges: Impairment and acceleration of store assets (c) 189.3 44.9 Total non-cash charges 189.3 44.9 Total restructuring and other related charges $ 238.3 $ 94.1 _______ (a) Severance and benefit costs reflect severance accruals as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. (b) Other related charges in Fiscal 2020 consist primarily of professional fees incurred in connection with the Chapter 11 cases prior to July 23, 2020. Charges in Fiscal 2019 consist of professional fees and other third-party costs incurred in connection with the identification and implementation of transformation initiatives. (c) Non-cash asset impairments in Fiscal 2020 primarily reflect write-offs of assets related to stores that are closing as a result of the Chapter 11 Cases. Charges in Fiscal 2019 reflect the write-down of corporate-owned office buildings in Duluth, MN and Mahwah, NJ to fair market value. (b) Restructuring and other related charges by operating segment are as follows: Fiscal Years Ended August 1, 2020 August 3, 2019 (millions) Cash related charges (1) : Severance and benefit costs: Premium Fashion $ 5.2 $ 3.3 Plus Fashion 8.1 3.5 Kids Fashion 7.9 1.8 Corporate 8.1 7.5 Total Severance and benefit costs 29.3 16.1 Professional fees and other related charges: Plus Fashion 2.4 — Kids Fashion 1.7 — Corporate 15.6 33.1 Total Professional fees and other related charges 19.7 33.1 Total Cash related charges 49.0 49.2 Non-cash charges: Impairment of assets: Premium Fashion 39.7 — Plus Fashion 43.1 — Kids Fashion 106.5 — Corporate — 44.9 Total Non-cash charges 189.3 44.9 Total restructuring and other related charges $ 238.3 $ 94.1 ________ (1) The charges incurred under the Company's cost reduction initiatives are more fully described in Note 8. |
Schedule of Restructuring Reserve by Type of Cost | A summary of activity for Fiscals 2019 and 2020 in the restructuring-related liabilities, which is included within Accrued expenses and other current liabilities, is as follows: Severance and benefit costs Other related charges Total (millions) Balance at August 4, 2018 $ 4.0 $ 6.0 $ 10.0 Additions charged to expense (a) 20.8 33.1 53.9 Cash payments (6.0) (38.7) (44.7) Balance at August 3, 2019 18.8 0.4 19.2 Additions charged to expense 29.3 19.7 49.0 Cash payments (19.5) (19.7) (39.2) Balance at August 1, 2020 $ 28.6 $ 0.4 $ 29.0 _______ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories by Brand | Inventory by segment is set forth below: August 1, August 3, (millions) Premium Fashion $ 184.6 $ 226.3 Plus Fashion 98.3 156.5 Kids Fashion 55.3 107.9 Total inventories $ 338.2 $ 490.7 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Buildings and improvements 5-40 years Distribution center equipment and machinery 3-20 years Leasehold improvements Shorter of the useful life or expected term of the lease Furniture, fixtures, and equipment 2-10 years Information technology 2-10 years Property and equipment, net, consist of the following: August 1, August 3, (millions) Property and Equipment: Land $ 13.2 $ 22.5 Buildings and improvements 144.2 194.8 Leasehold improvements 540.2 669.3 Furniture, fixtures and equipment 485.1 497.0 Information technology 790.4 793.8 Construction in progress 4.9 13.6 1,978.0 2,191.0 Less: accumulated depreciation (1,511.7) (1,355.5) Property and equipment, net $ 466.3 $ 835.5 |
Impairment Charges Related to Long-Lived Tangible Assets by Segment | Impairment charges related to retail store assets by segment are as follows: Fiscal Years Ended August 1, August 3, (millions) Premium Fashion $ 115.3 $ 2.2 Plus Fashion 25.2 17.8 Kids Fashion 56.3 1.7 Total impairment charges (a) $ 196.8 $ 21.7 ________ (a) The Company incurred additional impairment charges, which are considered to be outside the Company’s typical quarterly real-estate review. These additional charges are included within Restructuring and other related charges and are more fully described in Note 8. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following: August 1, August 3, (millions) Revolving credit facility $ 230.0 $ — Less: unamortized debt issuance costs (a) (2.1) (3.2) 227.9 (3.2) Term loan 1,271.6 1,371.5 Less: unamortized original issue discount (b) (8.9) (13.8) unamortized debt issuance costs (b) (10.1) (15.9) 1,252.6 1,341.8 Total debt 1,480.5 1,338.6 Less: current portion (227.9) — Less: Liabilities subject to compromise (c) (1,252.6) — Total long-term debt $ — $ 1,338.6 _______ (a) Prior to the Chapter 11 Cases, the unamortized debt issuance costs were amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) Prior to the Chapter 11 Cases, the original issue discount and debt issuance costs for the term loan were amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. (c) See Note 2 for additional information. |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: August 1, August 3, (millions) Prepaid expenses $ 66.0 $ 118.4 Accounts and other receivables (a) 101.4 122.2 Restricted cash 1.2 1.2 Other current assets 0.5 0.5 Total prepaid expenses and other current assets $ 169.1 $ 242.3 ________ (a) Decrease primarily due to the adoption of ASC 842 (see Note 5 for more information) and lower third-party receivables due from maurices for services performed under the agreements described in Note 3. |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: August 1, August 3, (millions) Accrued salary, wages and related expenses $ 49.8 $ 99.3 Accrued operating expenses 6.4 126.6 Sales tax payable 9.8 17.8 Income taxes payable 4.0 7.1 Other 0.1 22.5 Total accrued expenses and other current liabilities $ 70.1 $ 273.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Domestic and foreign pretax (loss) income from continuing operations is as follows: Fiscal Years Ended August 1, August 3, (millions) Domestic $ (1,152.7) $ (795.0) Foreign (42.8) 53.5 Total loss before (provision) benefit for income taxes and income (loss) from equity method investment $ (1,195.5) $ (741.5) |
Provisions (Benefits) from Continuing Operations for Current and Deferred Income Taxes | The (provision) benefit for current and deferred income taxes is as follows: Fiscal Years Ended August 1, August 3, Current: (millions) Federal $ 7.1 $ — State and local (1.6) (4.0) Foreign (6.7) (8.9) (1.2) (12.9) Deferred: Federal (8.1) 30.9 State and local (2.0) 5.5 Foreign (2.4) 0.4 (12.5) 36.8 Total (provision) benefit for income taxes $ (13.7) $ 23.9 |
Tax Rate Reconciliation | The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes provided are as set forth below: Fiscal Years Ended August 1, August 3, (millions) Benefit for income taxes at the U.S. federal statutory rate (a) $ 250.5 $ 158.3 Increase (decrease) due to: State and local income taxes, net of federal benefit 47.9 18.6 Foreign rate differential 3.0 2.8 Tax Cuts and Job Act — — Federal valuation allowance (217.3) (65.3) State valuation allowance (51.5) (14.5) Share-based compensation (5.7) (3.1) Goodwill impairment (31.3) (57.9) Net change relating to uncertain income tax benefits 2.2 (2.5) GILTI (3.8) (7.7) Other – net (7.7) (4.8) Total (provision) benefit for income taxes $ (13.7) $ 23.9 _______ |
Significant Components of Net Deferred Tax Assets (Liabilities) | Significant components of the Company's net deferred tax asset are as follows: August 1, August 3, Deferred tax assets (a) : (millions) Inventories $ 22.5 $ 15.4 Net operating loss carryforwards and tax credits 212.9 93.8 Operating lease liabilities 201.8 — Section 163(j) capitalized interest 29.2 10.4 Accrued payroll and benefits 33.4 29.8 Share-based compensation 5.2 11.0 Straight-line rent — 34.2 Federal benefit of uncertain tax positions 14.8 24.3 Gift cards and merchandise credits 10.3 9.3 Investments 9.6 6.8 Other 14.8 18.7 Total deferred tax assets 554.5 253.7 Deferred tax liabilities: Depreciation 33.0 43.6 Amortization 30.4 62.8 Right-of-use assets 98.4 — Other 5.0 15.8 Total deferred tax liabilities 166.8 122.2 Valuation allowance (393.4) (122.6) Net deferred tax (liability) asset $ (5.7) $ 8.9 _______ (a) Deferred tax asset of $0.7 million is included within Other assets and $6.4 million of deferred tax liabilities is included within Liabilities subject to compromise as of August 1, 2020. Deferred tax asset of $9.4 million is included within Other assets and $0.5 million of deferred tax liabilities is included in Other non-current liabilities as of August 3, 2019. |
Reconciliation of Beginning and Ending amounts of Unrecognized Tax Benefits, Excluding Interest and Penalties | A reconciliation of the beginning and ending amounts of unrecognized tax benefits related to continuing operations, excluding interest and penalties, is presented below: Fiscal Years Ended August 1, August 3, (millions) Unrecognized tax benefit beginning balance $ 49.8 $ 50.4 Additions related to tax positions in prior years 1.5 0.9 Reductions related to prior period tax positions (9.8) (0.8) Reductions related to settlements with taxing authorities (1.5) (0.1) Reductions related to expiration of statute of limitations (2.0) (0.6) Unrecognized tax benefit ending balance $ 38.0 $ 49.8 |
Reconciliation of Beginning and Ending Amounts of Accrued Interest and Penalties Related to Unrecognized Tax Benefits | The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. A reconciliation of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for the Company’s continuing operations is presented below: Fiscal Years Ended August 1, August 3, (millions) Accrued interest and penalties beginning balance $ 24.5 $ 21.4 Additions (reductions) charged to expense, net (0.3) 3.1 Accrued interest and penalties ending balance $ 24.2 $ 24.5 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Equity [Abstract] | |
Schedule of Weighted-Average Common Shares Outstanding | The weighted-average number of common shares outstanding used to calculate basic net loss per common share is reconciled to those shares used in calculating diluted net loss per common share as follows: Fiscal Years Ended August 1, 2020 August 3, 2019 (thousands) Basic 9,994.0 9,874.0 Dilutive effect of stock options, restricted stock and restricted stock units (a) — — Diluted shares 9,994.0 9,874.0 ________ (a) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Total Compensation Expense and Associated Income Tax Benefit | A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements on a consolidated basis is as follows: Fiscal Years Ended August 1, August 3, (millions) Compensation expense $ 4.3 $ 11.5 Income tax benefit $ — $ 2.4 |
Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted | The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the fiscal years presented were as follows: Fiscal Years Ended August 1, August 3, Expected term (years) 5.2 5.2 Expected volatility 61.7 % 47.5 % Risk-free interest rate 1.5 % 2.9 % Expected dividend yield — % — % Weighted-average grant date fair value $ 2.74 $ 1.77 |
Summary of Stock Option Activity Under all Plans | A summary of the stock option activity under service-based plans during Fiscal 2020 is as follows: Number of Weighted- Weighted- Aggregate Intrinsic Value (a) (thousands) (years) (millions) Options outstanding – August 3, 2019 850.4 $ 156.00 4.1 $ — Granted 275.9 5.12 Exercised — — Canceled/Forfeited (443.0) 177.66 Options outstanding – August 1, 2020 683.3 $ 81.05 4.6 $ — Options vested and expected to vest at August 1, 2020 (b) 676.6 $ 81.75 4.6 $ — Options exercisable at August 1, 2020 374.2 $ 130.17 3.4 $ — ________ (a) The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. (b) The number of options expected to vest takes into consideration estimated expected forfeitures. |
Summary of Restricted Equity Awards Activity | A summary of Service-based Restricted Equity Awards activity during Fiscal 2020 is as follows: Service-based Number of Weighted- (thousands) Nonvested at August 3, 2019 67.4 $ 91.42 Granted — — Vested (54.2) 82.58 Canceled/Forfeited (7.8) 88.68 Nonvested at August 1, 2020 5.4 $ 183.84 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure | Net sales and operating (loss) income for each operating segment are as follows: Fiscal Years Ended August 1, August 3, Net sales: (millions) Premium Fashion $ 1,852.6 $ 2,415.1 Plus Fashion 1,055.9 1,240.5 Kids Fashion 809.6 1,079.1 Total net sales $ 3,718.1 $ 4,734.7 Operating loss (a) : Premium Fashion $ (280.9) $ 35.1 Plus Fashion (90.1) (101.6) Kids Fashion (226.7) (66.8) Unallocated restructuring and other related charges (b) (238.3) (94.1) Unallocated impairment of goodwill (Note 7) (148.9) (276.0) Unallocated impairment of other intangible assets (Note 7) (128.7) (134.9) Total operating loss $ (1,113.6) $ (638.3) ________ (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. (b) Restructuring and other related charges by operating segment are as follows: Fiscal Years Ended August 1, 2020 August 3, 2019 (millions) Cash related charges (1) : Severance and benefit costs: Premium Fashion $ 5.2 $ 3.3 Plus Fashion 8.1 3.5 Kids Fashion 7.9 1.8 Corporate 8.1 7.5 Total Severance and benefit costs 29.3 16.1 Professional fees and other related charges: Plus Fashion 2.4 — Kids Fashion 1.7 — Corporate 15.6 33.1 Total Professional fees and other related charges 19.7 33.1 Total Cash related charges 49.0 49.2 Non-cash charges: Impairment of assets: Premium Fashion 39.7 — Plus Fashion 43.1 — Kids Fashion 106.5 — Corporate — 44.9 Total Non-cash charges 189.3 44.9 Total restructuring and other related charges $ 238.3 $ 94.1 ________ (1) The charges incurred under the Company's cost reduction initiatives are more fully described in Note 8. |
Restructuring and Other Related Charges | As a result of the cost reduction initiatives, the Company incurred the following charges, which are included within Restructuring and other related charges: Fiscal Years Ended August 1, 2020 August 3, 2019 Cash restructuring charges: (millions) Severance and benefit costs (a) $ 29.3 $ 16.1 Other related charges (b) 19.7 33.1 Total cash charges 49.0 49.2 Non-cash charges: Impairment and acceleration of store assets (c) 189.3 44.9 Total non-cash charges 189.3 44.9 Total restructuring and other related charges $ 238.3 $ 94.1 _______ (a) Severance and benefit costs reflect severance accruals as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. (b) Other related charges in Fiscal 2020 consist primarily of professional fees incurred in connection with the Chapter 11 cases prior to July 23, 2020. Charges in Fiscal 2019 consist of professional fees and other third-party costs incurred in connection with the identification and implementation of transformation initiatives. (c) Non-cash asset impairments in Fiscal 2020 primarily reflect write-offs of assets related to stores that are closing as a result of the Chapter 11 Cases. Charges in Fiscal 2019 reflect the write-down of corporate-owned office buildings in Duluth, MN and Mahwah, NJ to fair market value. (b) Restructuring and other related charges by operating segment are as follows: Fiscal Years Ended August 1, 2020 August 3, 2019 (millions) Cash related charges (1) : Severance and benefit costs: Premium Fashion $ 5.2 $ 3.3 Plus Fashion 8.1 3.5 Kids Fashion 7.9 1.8 Corporate 8.1 7.5 Total Severance and benefit costs 29.3 16.1 Professional fees and other related charges: Plus Fashion 2.4 — Kids Fashion 1.7 — Corporate 15.6 33.1 Total Professional fees and other related charges 19.7 33.1 Total Cash related charges 49.0 49.2 Non-cash charges: Impairment of assets: Premium Fashion 39.7 — Plus Fashion 43.1 — Kids Fashion 106.5 — Corporate — 44.9 Total Non-cash charges 189.3 44.9 Total restructuring and other related charges $ 238.3 $ 94.1 ________ (1) The charges incurred under the Company's cost reduction initiatives are more fully described in Note 8. |
Depreciation and Amortization Expense and Capital Expenditures for Each Segment | Depreciation and amortization expense and capital expenditures for each operating segment are as follows: Fiscal Years Ended August 1, August 3, Depreciation and amortization expense (a) : (millions) Premium Fashion $ 112.2 $ 133.9 Plus Fashion 60.3 74.7 Kids Fashion 60.2 71.8 Total depreciation and amortization expense $ 232.7 $ 280.4 Capital expenditures (a) : Premium Fashion $ 25.4 $ 28.6 Plus Fashion 4.0 8.5 Kids Fashion 9.1 6.1 Corporate (b) 26.4 85.9 Total capital expenditures $ 64.9 $ 129.1 ________ (a) Depreciation and amortization expense and capital expenditures related to the maurices and Dressbarn businesses, historically reported within the Value Fashion segment, were excluded from the tables and is classified as discontinued operations within the consolidated financial statements. Refer to Note 3. (b) Includes capital expenditures for technology and supply chain infrastructure. |
Additional Financial Informat_2
Additional Financial Information (Tables) | 12 Months Ended |
Aug. 01, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash Interest and Taxes | Supplemental disclosures related to leases are as follows: Fiscal Year Ended August 1, (millions) Cash payments arising from operating lease liabilities (included in cash flows from operating activities) $ 265.6 Non-cash operating lease liabilities from obtaining right-of-use assets 4.4 Fiscal Years Ended Cash Interest and Taxes: August 1, August 3, (millions) Cash paid for interest $ 85.0 $ 97.4 Cash paid for income taxes (a) $ 9.7 $ 5.9 _______ (a) Includes a net payment of $0.1 million for Fiscal 2020 and a net refund of $0.1 million for Fiscal 2019 related to the maurices and Dressbarn businesses, which are classified in discontinued operations. |
Schedule of Cash and Cash Equivalents | A reconciliation of cash, cash equivalents and restricted cash in the consolidated balance sheets to the amounts shown on the consolidated statements of cash flows is shown below: Reconciliation of cash, cash equivalents and restricted cash: August 1, August 3, Cash and cash equivalents $ 580.4 $ 323.8 Restricted cash included in other current assets 1.2 1.2 Cash included in discontinued operations — 4.2 Total cash, cash equivalents and restricted cash $ 581.6 $ 329.2 |
Description of Business (Detail
Description of Business (Details) $ in Millions | Mar. 16, 2020USD ($) | Aug. 01, 2020USD ($)Storesegment | Aug. 03, 2019USD ($) |
Segment Reporting Information [Line Items] | |||
Number of stores | 2,500 | ||
Net sales | $ | $ 3,718.1 | $ 4,734.7 | |
Number of operating segments | segment | 3 | ||
Revolving Credit Facility | |||
Segment Reporting Information [Line Items] | |||
Proceeds from Lines of Credit | $ | $ 230 | ||
Justice | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 747 | ||
Lane Bryant | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 637 | ||
Loft | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 619 | ||
Catherines | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 255 | ||
ANN | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 275 |
Liabilities Subject to Compromi
Liabilities Subject to Compromise Components (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 03, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Accounts payable | $ 161 | $ 316.1 | |
Accrued expenses and other current liabilities | 70.1 | 273.3 | |
Current portion of long-term debt | 227.9 | 0 | |
Deferred income | 116.9 | 114.1 | |
Current portion of lease liabilities | 0.6 | 0 | |
Lease-related liabilities | 0 | 204.6 | |
Other non-current liabilities | 42.2 | 171.9 | |
Liabilities Subject to Compromise, Total | 2,679.4 | $ 0 | |
Liabilities Subject to Compromise [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Accounts payable | 417 | ||
Accrued expenses and other current liabilities | 123 | ||
Current portion of long-term debt | [1] | 1,252.6 | |
Current portion of lease liabilities | 153.9 | ||
Lease-related liabilities | 626.4 | ||
Deferred Income Tax Liabilities, Net | 6.4 | ||
Other non-current liabilities | $ 106.5 | ||
[1] | (a) See Note 12 for more details of the prepetition debt reported as Liabilities subject to compromise |
Condensed Balance Sheet (Detail
Condensed Balance Sheet (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 04, 2019 | Aug. 03, 2019 | Aug. 04, 2018 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 580.4 | $ 323.8 | ||
Inventories | 338.2 | 490.7 | ||
Prepaid expenses and other current assets | 169.1 | 242.3 | ||
Current assets related to discontinued operations | 3.5 | 98.2 | ||
Assets, Current | 1,091.2 | 1,155 | ||
Property and equipment, net | 466.3 | 835.5 | ||
Operating lease right-of-use assets | 378.4 | $ 875.9 | 0 | |
Goodwill | 164.6 | 313.5 | $ 589.5 | |
Intangible Assets, Net (Excluding Goodwill) | 134.2 | 276.6 | ||
Equity method investment | 45.2 | 42.1 | ||
Other assets | 54.2 | 65.6 | ||
Assets | 2,334.1 | 2,699.8 | ||
Accounts payable | 161 | 316.1 | ||
Accrued expenses and other current liabilities | 70.1 | 273.3 | ||
Current portion of long-term debt | 227.9 | 0 | ||
Current liabilities related to discontinued operations | 23.5 | 94.7 | ||
Liabilities, Current | 600 | 798.2 | ||
Other non-current liabilities | 42.2 | 171.9 | ||
Non-current liabilities related to discontinued operations | 5.9 | 35.5 | ||
Liabilities subject to compromise | 2,679.4 | 0 | ||
Liabilities | 3,328.3 | 2,548.8 | ||
Stockholders' Equity Attributable to Parent | (994.2) | 151 | $ 798.5 | |
Liabilities and Equity | 2,334.1 | 2,699.8 | ||
Deferred income | 116.9 | $ 114.1 | ||
Debtor-in-Possession | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 553.5 | |||
Inventories | 342.6 | |||
Prepaid expenses and other current assets | 149.4 | |||
Current assets related to discontinued operations | 3.5 | |||
Assets, Current | 1,049 | |||
Property and equipment, net | 454.1 | |||
Operating lease right-of-use assets | 377 | |||
Goodwill | 164.6 | |||
Intangible Assets, Net (Excluding Goodwill) | 20.2 | |||
Equity method investment | 45.2 | |||
Other assets | 52.2 | |||
Investment in non-debtor subsidiaries | 177.3 | |||
Assets | 2,339.6 | |||
Accounts payable | 126.8 | |||
Accrued expenses and other current liabilities | 63.7 | |||
Current portion of long-term debt | 227.9 | |||
Current liabilities related to discontinued operations | 23.5 | |||
Liabilities, Current | 558.8 | |||
Other non-current liabilities | 34.3 | |||
Non-current liabilities related to discontinued operations | 5.9 | |||
Amounts due to non-debtor subsidiaries | 99.9 | |||
Liabilities subject to compromise | 2,679.4 | |||
Liabilities | 3,378.3 | |||
Stockholders' Equity Attributable to Parent | (1,038.7) | |||
Liabilities and Equity | 2,339.6 | |||
Deferred income | $ 116.9 |
Condensed Income Statement (Det
Condensed Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | ||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net sales | $ 3,718.1 | $ 4,734.7 | ||||
Cost of goods sold | (1,836.2) | (2,088) | ||||
Gross Profit | 1,881.9 | 2,646.7 | ||||
Buying, distribution and occupancy expenses | (825.8) | (953.8) | ||||
Selling, General and Administrative Expense | (1,421.1) | (1,545.8) | ||||
Restructuring and other related charges | [1] | (238.3) | (94.1) | |||
Impairment of goodwill | [1] | (148.9) | (276) | |||
Impairment of other intangible assets | $ (134.9) | (128.7) | [1] | (134.9) | [1] | |
Depreciation and amortization expense | [2] | (232.7) | (280.4) | |||
Costs and Expenses | (2,995.5) | (3,285) | ||||
Operating Income (Loss) | [1] | (1,113.6) | (638.3) | |||
Interest Expense | (99.4) | (107) | ||||
Interest and other (expense) income, net | (7.6) | 3.8 | ||||
Gain on extinguishment of debt | 28.5 | 0 | ||||
Reorganization Items | (3.4) | 0 | ||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | (1,195.5) | (741.5) | ||||
Income Tax Expense (Benefit) | (13.7) | 23.9 | ||||
Loss from equity method investments | 3.1 | (11.8) | ||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (1,206.1) | (729.4) | ||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | [3] | 64.3 | 23.5 | |||
Net loss | (1,141.8) | $ (661.4) | ||||
Debtor-in-Possession | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net sales | 3,707.2 | |||||
Cost of goods sold | (1,883) | |||||
Gross Profit | 1,824.2 | |||||
Buying, distribution and occupancy expenses | (814.3) | |||||
Selling, General and Administrative Expense | (1,406.6) | |||||
Restructuring and other related charges | (234.3) | |||||
Impairment of goodwill | (148.9) | |||||
Impairment of other intangible assets | (93.2) | |||||
Depreciation and amortization expense | (230.5) | |||||
Equity in losses of non-debtor subsidiaries | (28.8) | |||||
Costs and Expenses | (2,956.6) | |||||
Operating Income (Loss) | (1,132.4) | |||||
Interest Expense | (99.4) | |||||
Interest and other (expense) income, net | 4.5 | |||||
Gain on extinguishment of debt | 28.5 | |||||
Reorganization Items | (3.4) | |||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | (1,202.2) | |||||
Income Tax Expense (Benefit) | (7) | |||||
Loss from equity method investments | 3.1 | |||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (1,206.1) | |||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 64.3 | |||||
Net loss | $ (1,141.8) | |||||
[1] | (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. | |||||
[2] | a) Depreciation and amortization expense and capital expenditures related to the maurices and Dressbarn businesses, historically reported within the Value Fashion segment, were excluded from the tables and is classified as discontinued operations within the consolidated financial statements. Refer to Note 3. | |||||
[3] | Income from discontinued operations is presented net of income tax expense of $0.2 million and $31.2 million for the fiscal years ended August 1, 2020, and August 3, 2019, respectively. |
Condensed Cash Flow Statement (
Condensed Cash Flow Statement (Details) - USD ($) | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 04, 2018 | |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net Cash Provided by (Used in) Operating Activities | $ 131,600,000 | $ 21,100,000 | |
Payments to Acquire Property, Plant, and Equipment | (65,100,000) | (136,500,000) | |
Proceeds from the sale of assets | 20,600,000 | 1,000,000 | |
Proceeds from the sale of intangible assets | 5,000,000 | 0 | |
Net Cash Provided by (Used in) Investing Activities | (39,500,000) | 67,700,000 | |
Repayments of Secured Debt | (69,800,000) | 0 | |
Proceeds from revolver borrowings | 230,000,000 | 28,100,000 | |
Proceeds from stock options exercised and employee stock purchases | 100,000 | 900,000 | |
Net Cash Provided by (Used in) Financing Activities | 160,300,000 | 300,000 | |
Cash and Cash Equivalents, Period Increase (Decrease) | 252,400,000 | 89,100,000 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 581,600,000 | 329,200,000 | $ 240,100,000 |
Cash, cash equivalents and restricted cash at end of year | 581,600,000 | 329,200,000 | |
Debtor-in-Possession | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net Cash Provided by (Used in) Operating Activities | 138,300 | ||
Payments to Acquire Property, Plant, and Equipment | (65,100) | ||
Proceeds from the sale of assets | 20,600 | ||
Proceeds from the sale of intangible assets | 5,000 | ||
Net Cash Provided by (Used in) Investing Activities | (39,500) | ||
Repayments of Secured Debt | (69,800) | ||
Proceeds from revolver borrowings | 230,000 | ||
Proceeds from stock options exercised and employee stock purchases | 100 | ||
Net Cash Provided by (Used in) Financing Activities | 160,300 | ||
Cash and Cash Equivalents, Period Increase (Decrease) | 259,100 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 295,600 | ||
Cash, cash equivalents and restricted cash at end of year | $ 554,700 |
Voluntary Reorganization (Narra
Voluntary Reorganization (Narrative) (Details) - USD ($) | Jul. 23, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | Sep. 20, 2019 | Feb. 28, 2018 |
Restructuring Cost and Reserve [Line Items] | |||||
Liabilities Subject to Compromise, Capital Lease Obligations and Accrued Interest | $ 2,100,000 | ||||
Reorganization Items | $ (3,400,000) | $ 0 | |||
Revolving Credit Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Maximum borrowing capacity | $ 500,000,000 | ||||
Base Rate [Member] | Revolving Credit Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 150.00% | ||||
Minimum | Revolving Credit Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 1900.00% | ||||
Debtor-in-Possession Term Loan Credit Facility (DIP Term Facility) [Member] | Secured Debt [Member] | Base Rate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 10.75% | ||||
Debtor-in-Possession Term Loan Credit Facility (DIP Term Facility) [Member] | Secured Debt [Member] | LIBOR | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 11.75% | ||||
Debtor-in-Possession Term Loan Credit Facility (DIP Term Facility) [Member] | Secured Debt [Member] | Applicable Rate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Default Spread On Variable Rate | 2.00% | ||||
Debtor-in-Possession Term Loan Credit Facility (DIP Term Facility) [Member] | Secured Debt [Member] | Minimum | Base Rate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | ||||
Debtor-in-Possession Term Loan Credit Facility (DIP Term Facility) [Member] | Secured Debt [Member] | Minimum | LIBOR | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||
Last Out Exit Term Facility [Member] | Secured Debt [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Line Of Credit Facility, Terms, Funds Provided Upon Conversion | $ 88,200,000 | ||||
Letter of Credit | Revolving Credit Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Maximum borrowing capacity | $ 200,000,000 | ||||
Restructuring Support Agreement (RSA) [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Plan Of Reorganization, Terms, Capital To Be Contributed | 150,000,000 | ||||
Bankruptcy Claims, Amount of Claims under Review by Management | $ 500,000 | ||||
Consenting Stakeholders [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Sale of Stock, Percentage of Ownership after Transaction | 44.90% | ||||
Consenting Stakeholders [Member] | Term loan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Concentration Risk, Percentage | 68.00% | ||||
Backstop Parties [Member] | Debtor-in-Possession Term Loan Credit Facility (DIP Term Facility) [Member] | Secured Debt [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Line Of Credit Facility, Terms, Premium | $ 7,500,000 | ||||
Debt Instrument, Face Amount | 312,300,000 | ||||
Backstop Parties [Member] | Debtor-in-Possession Term Loan Credit Facility (DIP Term Facility) [Member] | Secured Debt [Member] | Revolving Credit Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Maximum borrowing capacity | 400,000,000 | $ 200,000,000 | |||
Backstop Parties [Member] | New Money DIP Loans [Member] | Secured Debt [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Face Amount | 150,000,000 | ||||
Backstop Parties [Member] | Roll-Up DIP Loans [Member] | Secured Debt [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Debt Instrument, Face Amount | $ 162,300,000 | ||||
Term Loan Lenders [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Sale of Stock, Percentage of Ownership after Transaction | 55.10% |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions | May 06, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Segment Reporting Information [Line Items] | ||||
Gain on on Disposal of Discontinued Operation, Net of Tax | [1] | $ 0 | $ 44.5 | |
Dressbarn wind down [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring costs, cumulative | 58 | |||
Restructuring costs, cumulative | 58 | |||
Maurices | Discontinued Operations, Disposed of by Sale | ||||
Segment Reporting Information [Line Items] | ||||
Proceeds from sale of subsidiary | $ 210 | |||
Transition services | 62.3 | |||
Gain on on Disposal of Discontinued Operation, Net of Tax | 44.5 | |||
Maurices | ||||
Segment Reporting Information [Line Items] | ||||
Minority ownership interest percentage | 49.60% | |||
Deferred Revenue | Maurices | Discontinued Operations, Disposed of by Sale | ||||
Segment Reporting Information [Line Items] | ||||
Transition services | $ 10 | |||
[1] | Gain on sale of discontinued operations is presented net of income tax benefit of $4.0 million for the fiscal year ended August 3, 2019. |
Basis of Presentation Basis o_3
Basis of Presentation Basis of Presentation (Summary of Discontinued Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Feb. 01, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation | $ 4 | |||
Gain on on Disposal of Discontinued Operation, Net of Tax | [1] | $ 0 | 44.5 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Income tax expense | 31.2 | |||
Income from discontinued operations, net of tax | [2] | 64.3 | 23.5 | |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ||||
Total assets related to discontinued operations | 3.5 | 98.2 | ||
Total liabilities related to discontinued operations | 23.5 | 94.7 | ||
Discontinued Operation, Alternative Cash Flow Information [Abstract] | ||||
Proceeds from Sale of Intangible Assets | $ 5 | |||
Dressbarn wind down [Member] | ||||
Discontinued Operation, Alternative Cash Flow Information [Abstract] | ||||
Restructuring Costs | 5 | |||
Restructuring costs, cumulative | 58 | |||
Maurices | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Consideration | 263.7 | |||
Net assets of maurices | (201.1) | |||
Transition services | (62.3) | |||
Transaction costs | (6.7) | |||
Other related costs | (5.4) | |||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | 40.5 | |||
Gain on on Disposal of Discontinued Operation, Net of Tax | 44.5 | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Net sales | 749.4 | |||
Depreciation and amortization expense | 21.2 | |||
Operating income | 97.7 | |||
Pretax income from discontinued operations | 98.2 | |||
Income tax expense | (21.8) | |||
Income from discontinued operations, net of tax | 76.4 | |||
Discontinued Operation, Alternative Cash Flow Information [Abstract] | ||||
Cash provided by operations of discontinued operations | 52.6 | 71.2 | ||
Cash used in investing activities of discontinued operations | 4.9 | (6.4) | ||
Dressbarn [Member] | Discontinued Operations, Disposed of by Sale | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Net sales | 326.6 | 758.7 | ||
Depreciation and amortization expense | 10.9 | 19.5 | ||
Operating income | 63.9 | (43.1) | ||
Pretax income from discontinued operations | 64.5 | (43.5) | ||
Income tax expense | (0.2) | (9.4) | ||
Income from discontinued operations, net of tax | 64.3 | (52.9) | ||
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ||||
Cash and Cash Equivalents | 0 | 4.2 | ||
Inventories | 0 | 57 | ||
Prepaid expenses and other current assets | 3.5 | 37 | ||
Property and equipment, net | 0 | 11.5 | ||
Total assets related to discontinued operations | 3.5 | 109.7 | ||
Accounts payable and other current liabilities | 5.5 | 94.7 | ||
Lease-related liabilities | 0 | 29.6 | ||
Disposal Group, Including Discontinued Operations, Liabilities Subject to Compromise | 19.9 | 0 | ||
Other liabilities | 4 | 5.9 | ||
Total liabilities related to discontinued operations | 29.4 | $ 130.2 | ||
Cash | Maurices | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Consideration | 209.8 | |||
Investment | Maurices | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Consideration | 53.9 | |||
Deferred Revenue | Maurices | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Transition services | $ (10) | |||
[1] | Gain on sale of discontinued operations is presented net of income tax benefit of $4.0 million for the fiscal year ended August 3, 2019. | |||
[2] | Income from discontinued operations is presented net of income tax expense of $0.2 million and $31.2 million for the fiscal years ended August 1, 2020, and August 3, 2019, respectively. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Revenue Recognition) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Aug. 01, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | |
Revenue from External Customer [Line Items] | |||
Estimated return liability | $ 14 | $ 19.9 | |
Right of Return Asset | $ 7.9 | 7.9 | 9.7 |
Deferred Revenue, Revenue Recognized, gift cards, gift certificates, merch credits | $ 38 | $ 39 | |
Percentage of total net sales | 100.00% | 100.00% | |
Contract With Customer, Liability, Gift Cards, Gift Certificates, Merchandise Credits | 78.4 | $ 78.4 | $ 79.7 |
Contract With Customer, Liability, Customer Loyalty Programs | 21 | 21 | 22.1 |
Contract With Customer, Liability, Revenue Recognized, Customer Loyalty Programs | $ 24 | 33 | |
Discontinued Operations, Disposed of by Sale | |||
Revenue from External Customer [Line Items] | |||
Deferred Revenue, Revenue Recognized, gift cards, gift certificates, merch credits | 6 | 12 | |
Accounting Standards Update 2014-09 | Discontinued Operations, Disposed of by Sale | |||
Revenue from External Customer [Line Items] | |||
Deferred Revenue, Revenue Recognized, customer loyalty programs | $ 5 | $ 9 | |
Apparel | |||
Revenue from External Customer [Line Items] | |||
Percentage of total net sales | 83.00% | 82.00% | |
Accessories | |||
Revenue from External Customer [Line Items] | |||
Percentage of total net sales | 12.00% | 13.00% | |
Other | |||
Revenue from External Customer [Line Items] | |||
Percentage of total net sales | 5.00% | 5.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Property, Plan and Equipment) (Details) | 12 Months Ended |
Aug. 01, 2020 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 40 years |
Machinery and Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Machinery and Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 20 years |
Furniture, fixtures and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Furniture, fixtures and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Information technology | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Information technology | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Stock-Based Compensation) (Details) | 12 Months Ended |
Aug. 01, 2020 | |
Maximum | Cash Settled LTIP Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Shipping and Fulfillment | $ 57,700,000 | $ 65,300,000 |
Marketing and Advertising Expense | 184,600,000 | 265,100,000 |
Foreign Currency Transaction Gain (Loss), before Tax | 400,000 | 700,000 |
Self Insurance Reserve | 55,100,000 | 60,800,000 |
Stop Loss Insurance Liability, Medical Claims | 750,000 | |
Stop Loss Insurance Liability, Workers' Compensation Claims | 500,000 | |
Stop Loss Insurance Liability, General Liability Claims | $ 150,000 | |
Tax benefit measurement | 50.00% | |
Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Shipping and Fulfillment | $ 1,200,000 | 10,700,000 |
Marketing and Advertising Expense | 6,900,000 | 59,900,000 |
Foreign Currency Transaction Gain (Loss), before Tax | 100,000 | |
Self Insurance Reserve | $ 9,600,000 | $ 15,700,000 |
Recently Issued Accounting St_3
Recently Issued Accounting Standards (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 04, 2019 | Aug. 03, 2019 |
Assets [Abstract] | |||
Prepaid expenses and other current assets | $ 169.1 | $ 242.3 | |
Current assets related to discontinued operations | 3.5 | 98.2 | |
Intangible Assets, Net (Excluding Goodwill) | 134.2 | 276.6 | |
Non-current assets related to discontinued operations | 0 | 11.5 | |
Liabilities and Equity [Abstract] | |||
Current portion of lease liabilities | 0.6 | 0 | |
Current liabilities related to discontinued operations | 23.5 | 94.7 | |
Lease-related liabilities | 0 | 204.6 | |
Operating Lease, Liability, Noncurrent | 0.8 | 0 | |
Non-current liabilities related to discontinued operations | 5.9 | 35.5 | |
Accumulated deficit | (2,089.2) | (935.9) | |
Operating Lease, Liability | 781.7 | $ 1,072 | |
Operating lease right-of-use assets | 378.4 | $ 875.9 | 0 |
Minimum | |||
Liabilities and Equity [Abstract] | |||
Operating Lease, Incremental Borrowing Rate | 24.00% | ||
Maximum | |||
Liabilities and Equity [Abstract] | |||
Operating Lease, Incremental Borrowing Rate | 30.00% | ||
Accounting Standards Update 2016-02 [Member] | |||
Assets [Abstract] | |||
Prepaid expenses and other current assets | (33.6) | 208.7 | |
Current assets related to discontinued operations | (7.6) | 90.6 | |
Intangible Assets, Net (Excluding Goodwill) | (8.4) | 268.2 | |
Non-current assets related to discontinued operations | 131.5 | 143 | |
Liabilities and Equity [Abstract] | |||
Current portion of lease liabilities | 141.3 | 141.3 | |
Current liabilities related to discontinued operations | 37.8 | 132.5 | |
Lease-related liabilities | (204.6) | 0 | |
Operating Lease, Liability, Noncurrent | 769.1 | 769.1 | |
Non-current liabilities related to discontinued operations | 94.2 | 129.7 | |
Accumulated deficit | (11.5) | (947.4) | |
Operating lease right-of-use assets | $ 744.4 | $ 744.4 |
Leases (Lease Costs) (Details)
Leases (Lease Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | ||
Leases [Abstract] | |||
Single lease costs | [1] | $ 368.9 | |
Variable lease costs | [2] | 201.4 | |
Operating Lease, Expense | 570.3 | ||
Less rental income | [3] | (3.9) | |
Total net rental expense | [4] | 566.4 | |
Occupancy costs, discontinued operations | $ 31.8 | $ 191.5 | |
Base rentals | 395.9 | ||
Percentage rentals | 26 | ||
Other occupancy costs, primarily CAM and real estate taxes | 171.8 | ||
Total net rental expense | [5] | $ 593.7 | |
[1] | a) Includes amortization and interest expense associated with operating lease right-of-use assets and liabilities. | ||
[2] | (b) Includes variable payments related to both lease and non-lease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as month-to-month rent payments while expired store lease contracts are renegotiated. | ||
[3] | (c) Substantially reflects rental income received related to Company-owned space in Duluth, MN. | ||
[4] | (d) Total occupancy costs included in discontinued operations related to Dressbarn were $31.8 million for the year ended August 1, 2020. | ||
[5] | (a) Total occupancy costs included in discontinued operations were $191.5 million for the year ended August 3, 2019. |
Leases (Lease Liabilities) (Det
Leases (Lease Liabilities) (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 04, 2019 | Aug. 03, 2019 | |
Leases [Abstract] | ||||
Weighted-average remaining lease term (years) | 5 years 3 months 18 days | |||
Weighted-average remaining lease term (years) | 25.40% | |||
Lease Maturity, Current [Abstract] | ||||
2021 | [1],[2],[3] | $ 351.8 | ||
2022 | 287.6 | |||
2023 | 211.7 | |||
2024 | 148 | |||
2025 | 101.8 | |||
Thereafter | 360.4 | |||
Total undiscounted operating lease liabilities | 1,461.3 | |||
Less imputed interest | (679.6) | |||
Present value of operating lease liabilities | 781.7 | $ 1,072 | ||
Less current portion of lease liabilities | (0.6) | $ 0 | ||
Operating Lease, Liability, Noncurrent | (0.8) | 0 | ||
Liabilities Subject to Compromise, Other Liabilities | $ 780.3 | |||
Lease Maturity, Prior [Abstract] | ||||
2020 | [4],[5] | 462 | ||
2021 | [4],[5] | 402.3 | ||
2022 | [4],[5] | 325.4 | ||
2023 | [4],[5] | 242.7 | ||
2024 | [4],[5] | 172.6 | ||
Thereafter | [4],[5] | 563.3 | ||
Total future minimum rentals | [4],[5] | $ 2,168.3 | ||
[1] | (c) As of August 1, 2020, a substantial amount of the current portion of operating leases liabilities and the long-term lease liabilities balances were classified to Liabilities subject to compromise, which is further discussed in Note 2. | |||
[2] | (a) Net of sublease income, which is not expected to be significant in any period. | |||
[3] | (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. | |||
[4] | (a) Net of sublease income, which is not expected to be significant in any period. | |||
[5] | (b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table. |
Leases (Schedule of Cash Flow,
Leases (Schedule of Cash Flow, Supplemental Disclosure) (Details) $ in Millions | 12 Months Ended |
Aug. 01, 2020USD ($) | |
Leases [Abstract] | |
Cash payments arising from operating lease liabilities (included in cash flows from operating activities) | $ 265.6 |
Non-cash operating lease liabilities from obtaining right-of-use assets | $ 4.4 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
May 02, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | ||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | $ 313.5 | $ 313.5 | $ 589.5 | |
Impairment of goodwill | (148.9) | (276) | ||
Goodwill, Ending Balance | 164.6 | 313.5 | ||
Lane Bryant | ||||
Goodwill [Line Items] | ||||
Goodwill, Impaired, Accumulated Impairment Loss | (387.7) | |||
Goodwill [Roll Forward] | ||||
Impairment of goodwill | (65.8) | |||
Premium Fashion | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | [1] | 305 | 305 | 305 |
Impairment of goodwill | [1] | (140.4) | 0 | |
Goodwill, Ending Balance | [1] | 164.6 | 305 | |
Plus Fashion | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | [2] | 0 | 0 | 115.1 |
Impairment of goodwill | [2] | 0 | (115.1) | |
Goodwill, Ending Balance | [2] | 0 | 0 | |
Kids Fashion | ||||
Goodwill [Line Items] | ||||
Goodwill, Impaired, Accumulated Impairment Loss | (169.4) | (160.9) | ||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | [3] | $ 8.5 | 8.5 | 169.4 |
Impairment of goodwill | [3] | 8.5 | (160.9) | |
Goodwill, Ending Balance | [3] | 0 | 8.5 | |
ANN | ||||
Goodwill [Line Items] | ||||
Goodwill, Impaired, Accumulated Impairment Loss | 569.3 | $ 428.9 | ||
Lane Bryant | ||||
Goodwill [Roll Forward] | ||||
Impairment of goodwill | (65.8) | |||
Catherines | ||||
Goodwill [Line Items] | ||||
Goodwill, Impaired, Accumulated Impairment Loss | 49.3 | |||
Goodwill [Roll Forward] | ||||
Impairment of goodwill | $ (49.3) | |||
[1] | (a) Net of accumulated impairment losses of $569.3 million and $428.9 million for the Premium Fashion segment of August 1, 2020 and August 3, 2019, respectively. | |||
[2] | b) Represents the Plus Fashion segment impairment losses as of August 3, 2019, which $65.8 million and $49.3 million relates to Lane Bryant and Catherines reporting units, respectively. The accumulated impairment loss at the Lane Bryant and Catherines reporting units as of August 1, 2020 and August 3, 2019 was $387.7 million and $49.3 million, respectively. | |||
[3] | (c) Net of accumulated impairment losses of $169.4 million and $160.9 million for the Kids Fashion segment impairment losses as of August 1, 2020 and August 3, 2019, respectively. |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Other Intangible Assets) (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 03, 2019 | |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross carrying amount | [1] | $ 62.1 | $ 100.3 |
Intangible assets subject to amortization, accumulated amortization | [1] | (62.1) | (86.6) |
Total | [1] | 0 | 13.7 |
Intangible assets not subject to amortization, gross carrying amount | 134.2 | 262.9 | |
Total intangible assets, gross carrying amount | 196.3 | 363.2 | |
Total intangible assets, Net | 134.2 | 276.6 | |
Brands and trade names | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets not subject to amortization, gross carrying amount | [2] | 134.2 | 252 |
Franchise rights | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets not subject to amortization, gross carrying amount | [2] | 0 | 10.9 |
Proprietary technology | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross carrying amount | [1] | 4.8 | 4.8 |
Intangible assets subject to amortization, accumulated amortization | [1] | (4.8) | (4.8) |
Total | [1] | 0 | 0 |
Customer relationships | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross carrying amount | [1] | 52 | 52 |
Intangible assets subject to amortization, accumulated amortization | [1] | (52) | (46.7) |
Total | [1] | 0 | 5.3 |
Favorable leases | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross carrying amount | [1] | 0 | 38.2 |
Intangible assets subject to amortization, accumulated amortization | [1] | 0 | (29.8) |
Total | [1] | 0 | 8.4 |
Trade names | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, gross carrying amount | [1] | 5.3 | 5.3 |
Intangible assets subject to amortization, accumulated amortization | [1] | (5.3) | (5.3) |
Total | [1] | $ 0 | $ 0 |
[1] | (b) There were no finite-lived intangible asset impairment losses recorded for any of the periods presented. | ||
[2] | (a) The Company recorded impairment charges related to trade names during Fiscal 2020 and Fiscal 2019, as discussed by reporting unit below. |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Amortization) (Details) - USD ($) $ in Millions | Aug. 21, 2015 | Aug. 01, 2020 | Aug. 03, 2019 |
Finite-Lived Intangible Assets [Line Items] | |||
Recognized amortization expense on other intangible assets | $ 5.3 | $ 7 | |
Favorable Leasehold | |||
Finite-Lived Intangible Assets [Line Items] | |||
Recognized amortization expense on other intangible assets | $ 8.5 | ||
Acquired intangible assets useful life (years) | 4 years | ||
ANN | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets useful life (years) | 5 years | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||
2020 | $ 5.3 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Impairment Assessment) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | May 02, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | ||||
Goodwill [Line Items] | ||||||||||
Income Valuation Approach | 75.00% | 75.00% | 75.00% | |||||||
Market Valuation Approach | 25.00% | 25.00% | 25.00% | |||||||
Impairment of goodwill | $ (148.9) | $ (276) | ||||||||
Share Price | $ 0.33 | $ 1.20 | $ 1.20 | $ 0.33 | ||||||
Effective Income Tax Rate Reconciliation, Impairment Of Intangible Assets, Amount | $ 33 | |||||||||
Blended Tax Rate | 25.00% | |||||||||
Unallocated impairment of other intangible assets | $ 134.9 | $ 128.7 | [1] | 134.9 | [1] | |||||
Goodwill, Impairment Loss, Continuing Operations | [1] | $ 148.9 | $ 276 | |||||||
Catherines | ||||||||||
Goodwill [Line Items] | ||||||||||
Income Valuation Approach | 100.00% | 100.00% | ||||||||
Impairment of goodwill | $ (49.3) | |||||||||
Catherines | Brands and trade names | ||||||||||
Goodwill [Line Items] | ||||||||||
Unallocated impairment of other intangible assets | $ 3 | $ 1 | 4 | $ 2 | ||||||
Justice | ||||||||||
Goodwill [Line Items] | ||||||||||
Impairment of goodwill | (70.5) | (8.5) | (160.9) | |||||||
Justice | Brands and trade names | ||||||||||
Goodwill [Line Items] | ||||||||||
Unallocated impairment of other intangible assets | 7.8 | 35 | 16.6 | |||||||
Justice | Franchise rights | ||||||||||
Goodwill [Line Items] | ||||||||||
Unallocated impairment of other intangible assets | $ 5 | 5 | 0.9 | |||||||
Ann Taylor | ||||||||||
Goodwill [Line Items] | ||||||||||
Discount Rate, Impairment Test, Initial Test | 28.00% | 28.00% | ||||||||
Ann Taylor | Brands and trade names | ||||||||||
Goodwill [Line Items] | ||||||||||
Unallocated impairment of other intangible assets | $ 1.3 | 17.7 | 10 | 15 | ||||||
ANN | ||||||||||
Goodwill [Line Items] | ||||||||||
Impairment of goodwill | $ (15) | $ (54.9) | ||||||||
Loft | ||||||||||
Goodwill [Line Items] | ||||||||||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 11.00% | 14.00% | 11.00% | |||||||
Discount Rate, Impairment Test | 25.50% | 24.90% | 24.90% | 25.50% | ||||||
Discount Rate, Impairment Test, Initial Test | 27.00% | 27.00% | ||||||||
Loft | Brands and trade names | ||||||||||
Goodwill [Line Items] | ||||||||||
Unallocated impairment of other intangible assets | $ 34.2 | $ 7.8 | 60.3 | |||||||
Lane Bryant | ||||||||||
Goodwill [Line Items] | ||||||||||
Impairment of goodwill | $ (65.8) | |||||||||
Lane Bryant | Brands and trade names | ||||||||||
Goodwill [Line Items] | ||||||||||
Unallocated impairment of other intangible assets | $ 14 | $ 23 | ||||||||
Minimum | ||||||||||
Goodwill [Line Items] | ||||||||||
Discount Rate, Impairment Test | 27.00% | 14.00% | 14.00% | 27.00% | ||||||
Maximum | ||||||||||
Goodwill [Line Items] | ||||||||||
Discount Rate, Impairment Test | 29.00% | 15.00% | 15.00% | 29.00% | ||||||
[1] | (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. |
Restructuring and Other Relat_3
Restructuring and Other Related Charges (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 04, 2018 | ||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance Costs | $ 29.3 | [1] | $ 20.8 | [2] | ||
Restructuring Reserve | 29 | 19.2 | $ 10 | |||
Restructuring Charges, Excluding Reversal Of Compensation Expense | 49 | 53.9 | [2] | |||
Restructuring Charges | [3] | 238.3 | 94.1 | |||
Total impairment charges (a) | [4] | 196.8 | 21.7 | |||
Cash payments | (39.2) | (44.7) | ||||
Deferred Compensation Arrangement With Individual, Reversal Of Compensation Expense | 4.7 | |||||
Cash-related restructuring charges | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance Costs | [1],[5] | 29.3 | 16.1 | |||
Professional Fees | [6] | 19.7 | 33.1 | [2] | ||
Restructuring Charges | [5] | 49 | 49.2 | |||
Non-cash charges | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Charges | 189.3 | 44.9 | ||||
Total impairment charges (a) | [7] | 189.3 | 44.9 | |||
Employee Severance [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Reserve | 28.6 | 18.8 | 4 | |||
Cash payments | (19.5) | (6) | ||||
Other Restructuring [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring Reserve | 0.4 | 0.4 | $ 6 | |||
Cash payments | $ (19.7) | $ (38.7) | ||||
[1] | (a) Severance and benefit costs reflect severance accruals as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. | |||||
[2] | (a) Additions charged to expense for Fiscal 2019 exclude $(4.7) million of long-term incentive program expense reversals related to the announced changes to the Company's senior leadership team. | |||||
[3] | (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. | |||||
[4] | The Company incurred additional impairment charges, which are considered to be outside the Company’s typical quarterly real-estate review. These additional charges are included within Restructuring and other related charges and are more fully described in Note 8. | |||||
[5] | (1) The charges incurred under the Company's cost reduction initiatives are more fully described in Note 8. | |||||
[6] | (b) Other related charges in Fiscal 2020 consist primarily of professional fees incurred in connection with the Chapter 11 cases prior to July 23, 2020. Charges in Fiscal 2019 consist of professional fees and other third-party costs incurred in connection with the identification and implementation of transformation initiatives. | |||||
[7] | (c) Non-cash asset impairments in Fiscal 2020 primarily reflect write-offs of assets related to stores that are closing as a result of the Chapter 11 Cases. Charges in Fiscal 2019 reflect the write-down of corporate-owned office buildings in Duluth, MN and Mahwah, NJ to fair market value. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Inventory [Line Items] | ||
Total Inventories | $ 338.2 | $ 490.7 |
Premium Fashion | ||
Inventory [Line Items] | ||
Total Inventories | 184.6 | 226.3 |
Plus Fashion | ||
Inventory [Line Items] | ||
Total Inventories | 98.3 | 156.5 |
Kids Fashion | ||
Inventory [Line Items] | ||
Total Inventories | 55.3 | $ 107.9 |
Plus Fashion And Kids Fashion [Member] | ||
Inventory [Line Items] | ||
Inventory Write-down | $ 37 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | ||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 1,978 | $ 2,191 | |
Less: accumulated depreciation | (1,511.7) | (1,355.5) | |
Property and equipment, net | 466.3 | 835.5 | |
Total impairment charges (a) | [1] | 196.8 | 21.7 |
Depreciation expense | 227.4 | 273.4 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 13.2 | 22.5 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 144.2 | 194.8 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 540.2 | 669.3 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 485.1 | 497 | |
Information technology | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 790.4 | 793.8 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 4.9 | $ 13.6 | |
[1] | The Company incurred additional impairment charges, which are considered to be outside the Company’s typical quarterly real-estate review. These additional charges are included within Restructuring and other related charges and are more fully described in Note 8. |
Property and Equipment (Long-Li
Property and Equipment (Long-Lived Asset Impairments) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total impairment charges (a) | [1] | $ 196.8 | $ 21.7 | |
Premium Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total impairment charges (a) | 115.3 | 2.2 | ||
Plus Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total impairment charges (a) | 25.2 | 17.8 | ||
Kids Fashion | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total impairment charges (a) | $ 56.3 | $ 1.7 | ||
Corporate Segment [Member] | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total impairment charges (a) | $ 12.9 | |||
Corporate Segment [Member] | Mahwah, NJ [Member] | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total impairment charges (a) | 8.4 | |||
Corporate Segment [Member] | Duluth, Minnesota [Member] | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Total impairment charges (a) | $ 4.5 | |||
[1] | The Company incurred additional impairment charges, which are considered to be outside the Company’s typical quarterly real-estate review. These additional charges are included within Restructuring and other related charges and are more fully described in Note 8. |
Property and Equipment (Depreci
Property and Equipment (Depreciation) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 227.4 | $ 273.4 |
Investment and Variable Inter_2
Investment and Variable Interest Entity (Details) - USD ($) $ in Millions | May 06, 2019 | Aug. 01, 2020 | Aug. 03, 2019 |
Schedule of Equity Method Investments [Line Items] | |||
Loss from equity method investments | $ 3.1 | $ (11.8) | |
Equity method investment | 45.2 | $ 42.1 | |
Maurices | Discontinued Operations, Disposed of by Sale | |||
Schedule of Equity Method Investments [Line Items] | |||
Proceeds from sale of subsidiary | $ 210 | ||
Consideration | 263.7 | ||
Receivable, Equity Method Investment | 35.3 | ||
Transition services | 62.3 | ||
Investment | Maurices | Discontinued Operations, Disposed of by Sale | |||
Schedule of Equity Method Investments [Line Items] | |||
Consideration | 53.9 | ||
Other Noncurrent Assets | Maurices | Discontinued Operations, Disposed of by Sale | |||
Schedule of Equity Method Investments [Line Items] | |||
Receivable, Equity Method Investment | $ 12 | ||
Maurices | |||
Schedule of Equity Method Investments [Line Items] | |||
Minority ownership interest percentage | 49.60% |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 03, 2019 | Aug. 21, 2015 | |
Debt Instrument [Line Items] | ||||
Long-term Debt, Total | $ 1,480.5 | $ 1,338.6 | ||
Less: current portion | (227.9) | 0 | ||
Long-term debt | [1] | 0 | 1,338.6 | |
Term loan | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Gross | 1,271.6 | 1,371.5 | $ 1,800 | |
Unamortized original issue discount | [2] | (8.9) | (13.8) | |
Unamortized debt issuance costs | [2] | (10.1) | (15.9) | |
Long-term Debt, Total | $ 1,252.6 | 1,341.8 | ||
Debt interest rate, percentage | 6.30% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Gross | $ 230 | 0 | ||
Unamortized debt issuance costs | [3] | (2.1) | (3.2) | |
Long-term Debt, Total | $ 227.9 | $ (3.2) | ||
[1] | (c) See Note 2 for additional information. | |||
[2] | (b) Prior to the Chapter 11 Cases, the original issue discount and debt issuance costs for the term loan were amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. (c) See Note 2 for additional information. | |||
[3] | (a) Prior to the Chapter 11 Cases, the unamortized debt issuance costs were amortized on a straight-line basis over the life of the amended revolving credit agreement. |
Debt (Amended Revolving Credit
Debt (Amended Revolving Credit Agreement) (Details) - USD ($) | Mar. 16, 2020 | Feb. 28, 2018 | Aug. 21, 2015 | Aug. 01, 2020 | Sep. 20, 2019 |
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 500,000,000 | ||||
Optional additional increase in credit facility | $ 200,000,000 | ||||
Line of credit facility, maturity, extension, years from closing date | 5 years | ||||
Line of credit facility, maturity, extension,days prior to term loan maturity | 91 days | ||||
Line of credit available, in excess of | $ 100,000,000 | ||||
Line of credit, in excess of, percentage of credit limit | 20.00% | ||||
Proceeds from Lines of Credit | $ 230,000,000 | ||||
Line of Credit Facility, Interest Rate at Period End | 3.74% | ||||
Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee on unutilized revolving credit facility | 20.00% | ||||
Debt Instrument, Interest Rate, Stated Percentage | 1900.00% | ||||
Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee on unutilized revolving credit facility | 25.00% | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3000.00% | ||||
Revolving Credit Facility | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 150.00% | ||||
Eurodollar Borrowings | Revolving Credit Facility | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 125.00% | ||||
Eurodollar Borrowings | Revolving Credit Facility | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 150.00% | ||||
Alternative Base Rate Borrowings | Revolving Credit Facility | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 100.00% | ||||
Alternative Base Rate Borrowings | Revolving Credit Facility | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin above base rate | 25.00% | ||||
Alternative Base Rate Borrowings | Revolving Credit Facility | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin above base rate | 50.00% | ||||
Alternative Base Rate Borrowings | Revolving Credit Facility | Federal funds rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 50.00% | ||||
Letter of Credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 200,000,000 | ||||
Swingline Loans | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 30,000,000 | ||||
Term loan | Maximum | |||||
Debt Instrument [Line Items] | |||||
Term loan, outstanding principal amount | $ 150,000,000 | ||||
Term loan | Eurodollar Borrowings | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 450.00% | ||||
Term loan | Alternative Base Rate Borrowings | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 100.00% | ||||
Applicable margin above base rate | 350.00% | ||||
Term loan | Alternative Base Rate Borrowings | Federal funds rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 50.00% |
Debt (Term Loan) (Details)
Debt (Term Loan) (Details) - USD ($) | Aug. 21, 2015 | Nov. 01, 2020 | Jan. 27, 2018 | Aug. 01, 2020 | Aug. 03, 2019 | May 28, 2020 |
Debt Instrument [Line Items] | ||||||
(Loss) Gain on extinguishment of debt | $ (28,500,000) | $ 0 | ||||
Payment for Debt Extinguishment or Debt Prepayment Cost | 20,400,000 | |||||
Debt Instrument, Repurchase Amount | 79,500,000 | $ 42,000,000 | ||||
Debt Instrument, Repurchase Purchase Price | 49,400,000 | $ 28,600,000 | ||||
Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | $ 1,800,000,000 | 1,271,600,000 | 1,371,500,000 | |||
Debt discount percentage | 2.00% | |||||
Additional term facility borrowing capacity | $ 200,000,000 | |||||
Mandatory quarterly repayments in calendar 2016 and thereafter | $ 4,500,000 | 22,500,000 | ||||
Remaining balloon payment required at maturity | 1,200,000,000 | |||||
Repayments of debt | $ 225,000,000 | |||||
Repayments of debt, future | 180,000,000 | |||||
Threshold for repayment, net proceeds of asset dispositions and certain casualty events | $ 25,000,000 | |||||
Debt interest rate, percentage | 6.30% | |||||
Eurodollar Borrowings | Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread | 450.00% | |||||
Debt interest rate, percentage | 5.25% | |||||
Eurodollar Borrowings | LIBOR | Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Base rate floor | 75.00% | |||||
Alternative Base Rate Borrowings | Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Base rate floor | 175.00% | |||||
Alternative Base Rate Borrowings | Federal funds rate | Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread | 50.00% | |||||
Alternative Base Rate Borrowings | LIBOR | Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread | 100.00% | |||||
Applicable margin above base rate | 350.00% | |||||
Scenario, Forecast [Member] | Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt, future | $ 22,500,000 |
Debt (Restrictions Under the Te
Debt (Restrictions Under the Term Loan and the Amended Revolving Credit Agreement) (Details) - Revolving Credit Facility $ in Millions | Feb. 28, 2018USD ($) |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Percentage of Credit Limit | 10.00% |
Line of Credit Facility, Covenant Terms, Remaining Borrowing Capacity | $ 37.5 |
Minimum | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Fixed Charge Coverage Ratio | 1 |
Debt Instrument, Covenant, Days of Availability | 3 days |
Debt instrument, restricted payment term, availability as percentage of aggregate commitment | 20.00% |
Maximum | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Days of Availability | 30 days |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 03, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |||
Prepaid expenses | $ 66 | $ 118.4 | |
Accounts and other receivables | [1] | 101.4 | 122.2 |
Restricted Cash | 1.2 | 1.2 | |
Other current assets | 0.5 | 0.5 | |
Total prepaid expenses and other current assets | $ 169.1 | $ 242.3 | |
[1] | (a) Decrease primarily due to the adoption of ASC 842 (see Note 5 for more information) and lower third-party receivables due from maurices for services performed under the agreements described in Note 3. |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 03, 2019 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued salary, wages and related expenses | $ 49.8 | $ 99.3 |
Accrued operating expenses | 6.4 | 126.6 |
Sales tax payable | 9.8 | 17.8 |
Income taxes payable | 4 | 7.1 |
Other | 0.1 | 22.5 |
Total accrued expenses and other current liabilities | $ 70.1 | $ 273.3 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Nov. 01, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | |
Derivative [Line Items] | |||
Unrealized Gain (Loss) on Interest Rate Cash Flow Hedges, Pretax, Accumulated Other Comprehensive Income (Loss) | $ 6.3 | ||
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | $ 11.3 | ||
Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Derivative, Fair Value | 6.3 | ||
Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Derivative [Line Items] | |||
Derivative, Fair Value | $ 8.7 | ||
Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | Scenario, Forecast [Member] | |||
Derivative [Line Items] | |||
Payments of derivative termination | $ 7.3 | ||
Accrued expenses and other current liabilities | Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Derivative [Line Items] | |||
Derivative, Fair Value | 3.1 | ||
Other non-current liabilities | Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Derivative, Fair Value | $ 3.2 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | 12 Months Ended | |||
Aug. 01, 2020USD ($) | Aug. 03, 2019USD ($)Storebuilding | Aug. 04, 2018USD ($)Store | Aug. 04, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Operating lease right-of-use assets | $ 378.4 | $ 0 | $ 875.9 | |
Term loan | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | 305.2 | 850.3 | ||
Fair Value, Measurements, Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-Lived Assets | 49.2 | $ 217.4 | $ 145.5 | |
Number Of Under-Performing Stores | Store | 1,924 | 649 | ||
Number of office buildings | building | 2 | |||
Long Lived Assets, Fair Value | $ 60.2 | |||
Impairment of tangible assets | 168.2 | 85.3 | ||
Operating lease right-of-use assets | 107.1 | 258.2 | ||
Operating Lease, Impairment Loss | $ 151.1 | |||
Fair Value, Measurements, Nonrecurring | Discontinued Operations [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-Lived Assets | $ 10 | $ 28.6 | ||
Number Of Under-Performing Stores | Store | 421 | |||
Impairment of tangible assets | $ 18.6 |
Income Taxes (Domestic and Fore
Income Taxes (Domestic and Foreign Pretax Income) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Domestic and Foreign Income [Line Items] | ||
Total loss before (provision) benefit for income taxes and income (loss) from equity method investment | $ (1,195.5) | $ (741.5) |
Domestic | ||
Domestic and Foreign Income [Line Items] | ||
Total loss before (provision) benefit for income taxes and income (loss) from equity method investment | (1,152.7) | (795) |
Foreign | ||
Domestic and Foreign Income [Line Items] | ||
Total loss before (provision) benefit for income taxes and income (loss) from equity method investment | $ (42.8) | $ 53.5 |
Income Taxes (Provisions (Benef
Income Taxes (Provisions (Benefits) from Continuing Operations for Current and Deferred Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Feb. 01, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | |
Current: | |||
Federal | $ 7.1 | $ 0 | |
State and local | (1.6) | (4) | |
Foreign | (6.7) | (8.9) | |
Current income tax expense, total | (1.2) | (12.9) | |
Deferred: | |||
Federal | (8.1) | 30.9 | |
State and local | (2) | 5.5 | |
Foreign | (2.4) | 0.4 | |
Total deferred income tax expense (benefit), total | (12.5) | 36.8 | |
Total (provision) benefit for income taxes | $ (13.7) | $ 23.9 | |
Domestic | |||
Income Taxes [Line Items] | |||
Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Income Tax Benefit (Expense), Federal, Increase (Decrease), Amount | $ 2.3 | ||
Tax Cuts And Jobs Act Of 2017, Transition Tax For Accumulated Foreign Earnings, Income Tax Expense (Benefit) | 26.9 | ||
State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
Tax Cuts And Jobs Act Of 2017, Transition Tax For Accumulated Foreign Earnings, Income Tax Expense (Benefit) | 0.9 | ||
Tax Cuts And Jobs Act Of 2017, Change In Tax Rate, Income Tax Benefit (Expense), State, Increase (Decrease), Amount | $ 0.2 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | May 26, 2020 | Feb. 01, 2020 | Aug. 01, 2020 | Aug. 03, 2019 |
Income Taxes [Line Items] | ||||
Tax Benefits Preservation Plan, Ownership Percentage Acquired | 4.90% | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.001 | |||
Effective Income Tax Rate Reconciliation, Refundable Alternative Minimum Tax Credit Requested, Amount | $ 1.4 | |||
Effective Income Tax Rate Reconciliation, Percent | (1.10%) | |||
Deferred Tax Assets, Net of Valuation Allowance | $ 99.2 | |||
Deferred Tax Assets, Valuation Allowance | 393.4 | $ 122.6 | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 270.8 | |||
Tax credits received | 1.7 | $ 5.9 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 44.7 | |||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 1 | |||
Series A Preferred Stock [Member] | ||||
Income Taxes [Line Items] | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | |||
Ascena Retail Group, Inc. [Member] | ||||
Income Taxes [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.90% | |||
Noncontrolling Interest, Owndership Percentage By Noncontrolling Owners, Acquired | 0.50% | |||
Domestic | ||||
Income Taxes [Line Items] | ||||
Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Income Tax Benefit (Expense), Federal, Increase (Decrease), Amount | $ 2.3 | |||
Tax Cuts And Jobs Act Of 2017, Transition Tax For Accumulated Foreign Earnings, Income Tax Expense (Benefit) | 26.9 | |||
State and Local Jurisdiction | ||||
Income Taxes [Line Items] | ||||
Tax Cuts And Jobs Act Of 2017, Transition Tax For Accumulated Foreign Earnings, Income Tax Expense (Benefit) | 0.9 | |||
Tax Cuts And Jobs Act Of 2017, Change In Tax Rate, Income Tax Benefit (Expense), State, Increase (Decrease), Amount | $ 0.2 | |||
Operating Loss Carryforwards | 780.2 | |||
State and Local Jurisdiction | Period Of Expiration Indefinite [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | 46.4 | |||
State and Local Jurisdiction | Period Of Expiration Within Five Years [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 58.4 | |||
State and Local Jurisdiction | Period Of Expiration Within Five Years [Member] | Minimum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 1 year | |||
State and Local Jurisdiction | Period Of Expiration Within Five Years [Member] | Maximum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 5 years | |||
State and Local Jurisdiction | Period Of Expiration Six To Ten Years [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 93 | |||
State and Local Jurisdiction | Period Of Expiration Six To Ten Years [Member] | Minimum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 6 years | |||
State and Local Jurisdiction | Period Of Expiration Six To Ten Years [Member] | Maximum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 10 years | |||
State and Local Jurisdiction | Period Of Expiration Eleven To Fifteen Years [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 111.3 | |||
State and Local Jurisdiction | Period Of Expiration Eleven To Fifteen Years [Member] | Minimum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 11 years | |||
State and Local Jurisdiction | Period Of Expiration Eleven To Fifteen Years [Member] | Maximum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 15 years | |||
State and Local Jurisdiction | Period Of Expiration Sixteen To Twenty Years [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 471.1 | |||
State and Local Jurisdiction | Period Of Expiration Sixteen To Twenty Years [Member] | Minimum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 16 years | |||
State and Local Jurisdiction | Period Of Expiration Sixteen To Twenty Years [Member] | Maximum | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards Expiration Period | 20 years | |||
Internal Revenue Service (IRS) [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 716.6 | |||
Operating Loss Carryforwards Expiration Period | 20 years | |||
Federal Jurisdiction [Member] | Period Of Expiration Eighteen Years [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 81.2 | |||
Federal Jurisdiction [Member] | Period Of Expiration Nineteen Years [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | 64.5 | |||
Federal Jurisdiction [Member] | Period Of Expiration Twenty Years [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | 128.8 | |||
Federal Jurisdiction [Member] | Period Of Expiration Indefinite [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 442.1 |
Income Taxes (Tax Rate Reconcil
Income Taxes (Tax Rate Reconciliation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | ||
Valuation Allowance [Line Items] | |||
(Income) loss from equity method investment | $ (3.1) | $ 11.8 | |
Benefit for income taxes at the U.S. federal statutory rate (a) | [1] | 250.5 | 158.3 |
Increase (decrease) due to: | |||
Benefit for income taxes at the U.S. federal statutory rate (a) | [1] | 250.5 | 158.3 |
State and local income taxes, net of federal benefit | 47.9 | 18.6 | |
Foreign Rate Differential | 3 | 2.8 | |
Tax Cuts and Job Act | 0 | 0 | |
Federal valuation allowance | (217.3) | (65.3) | |
State valuation allowance | (51.5) | (14.5) | |
Share-based Compensation Cost | (5.7) | (3.1) | |
Goodwill impairment | (31.3) | (57.9) | |
Net change relating to uncertain income tax benefits | 2.2 | (2.5) | |
GILTI | (3.8) | (7.7) | |
Other – net | (7.7) | (4.8) | |
Total (provision) benefit for income taxes | $ (13.7) | $ 23.9 | |
[1] | The Fiscal 2020 benefit of $250.5 million and the Fiscal 2019 benefit of $158.3 million include the $3.1 million and $(11.8) million Income (loss) from equity method investment respectively at the federal statutory tax rate. |
Income Taxes (Significant Compo
Income Taxes (Significant Components of Net Deferred Tax Assets (Liabilities)) (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Aug. 03, 2019 | |
Income Taxes [Line Items] | |||
Deferred Tax Assets, Net | $ 8.9 | ||
Deferred tax assets (a): | |||
Inventories | [1] | $ 22.5 | 15.4 |
Net operating loss carryforwards and tax credits | [1] | 212.9 | 93.8 |
Deferred Tax Assets Operating Lease Liabilities | [1] | 201.8 | 0 |
Deferred Tax Assets Section 163(j) Capitalized Interest | [1] | 29.2 | 10.4 |
Accrued payroll and benefits | [1] | 33.4 | 29.8 |
Share-based compensation | [1] | 5.2 | 11 |
Straight-line rent | [1] | 0 | 34.2 |
Federal benefit of uncertain tax positions | [1] | 14.8 | 24.3 |
Gift Cards and Merchandise Credits | [1] | 10.3 | 9.3 |
Deferred Tax Assets, Investments | [1] | 9.6 | 6.8 |
Other | [1] | 14.8 | 18.7 |
Total deferred tax assets | [1] | 554.5 | 253.7 |
Deferred tax liabilities: | |||
Depreciation | 33 | 43.6 | |
Amortization | 30.4 | 62.8 | |
Right-of-use assets | 98.4 | 0 | |
Other | 5 | 15.8 | |
Total deferred tax liabilities | 166.8 | 122.2 | |
Valuation allowance | (393.4) | (122.6) | |
Deferred Tax Liabilities, Net | (5.7) | ||
Other Assets | |||
Income Taxes [Line Items] | |||
Deferred Tax Assets, Net | 0.7 | 9.4 | |
Deferred Tax Liabilities [Member] | |||
Income Taxes [Line Items] | |||
Deferred Tax Assets, Net | $ 0.5 | ||
Liabilities Subject to Compromise [Member] | |||
Deferred tax liabilities: | |||
Deferred Income Tax Liabilities, Net | $ 6.4 | ||
[1] | (a) Deferred tax asset of $0.7 million is included within Other assets and $6.4 million of deferred tax liabilities is included within Liabilities subject to compromise as of August 1, 2020. Deferred tax asset of $9.4 million is included within Other assets and $0.5 million of deferred tax liabilities is included in Other non-current liabilities as of August 3, 2019. |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Beginning and Ending amounts of Unrecognized Tax Benefits, Excluding Interest and Penalties) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefit beginning balance | $ 49.8 | $ 50.4 |
Additions related to tax positions in prior years | 1.5 | 0.9 |
Reductions related to prior period tax positions | (9.8) | (0.8) |
Reductions related to settlements with taxing authorities | (1.5) | (0.1) |
Reductions related to expiration of statute of limitations | (2) | (0.6) |
Unrecognized tax benefit ending balance | $ 38 | $ 49.8 |
Income Taxes (Reconciliation _2
Income Taxes (Reconciliation of Beginning and Ending Amounts of Accrued Interest and Penalties Related to Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Income Taxes [Line Items] | ||
Accrued interest and penalties beginning balance | $ 24.5 | $ 21.4 |
Additions (reductions) charged to expense, net | (0.3) | 3.1 |
Accrued interest and penalties ending balance | 24.2 | 24.5 |
Other non-current liabilities | ||
Income Taxes [Line Items] | ||
Unrecognized tax benefits (including accrued interest and penalties) | $ 59.5 | $ 71.5 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Millions | 12 Months Ended |
Aug. 01, 2020USD ($) | |
Commitments and Contingencies [Line Items] | |
Period prior to shipment date to cancel commitments (in days) | 30 days |
Outstanding letters of credit | $ 99.8 |
Minimum | |
Commitments and Contingencies [Line Items] | |
Period of preliminary commitments made in advance of planned receipt (in months) | 5 months |
Maximum | |
Commitments and Contingencies [Line Items] | |
Period of preliminary commitments made in advance of planned receipt (in months) | 7 months |
Equity (Narrative) (Details)
Equity (Narrative) (Details) - USD ($) | 12 Months Ended | |||||
Aug. 01, 2020 | Aug. 04, 2018 | Dec. 19, 2019 | Dec. 18, 2019 | Aug. 03, 2019 | Dec. 31, 2015 | |
Class of Stock [Line Items] | ||||||
Number of common shares authorized | 18,000,000 | 18,000,000 | ||||
Number of preferred shares authorized | 5,000 | |||||
Number of preferred shares issued | 0 | |||||
Treasury Stock, Shares, Acquired | 0 | |||||
Common stock, outstanding (shares) | 10,087,000 | 9,972,221 | 199,444,436 | 9,925,000 | ||
Stock Repurchase Program 2016 | ||||||
Class of Stock [Line Items] | ||||||
Share repurchase program authorized amount | $ 200,000,000 | |||||
Number of common shares repurchased | 100,000 | |||||
Value of common shares repurchased | $ 18,600,000 | |||||
Stock repurchase program remaining authorized repurchase amount | $ 181,400,000 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Amount of repurchases in excess, subject to certain restrictions | $ 100,000,000 | |||||
Common stock, outstanding (shares) | 10,087,000,000 | 9,817,000,000 | 9,925,000,000 |
Equity (Net Loss per Common Sha
Equity (Net Loss per Common Share) (Details) - shares shares in Thousands | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | ||
Equity [Abstract] | |||
Basic (in shares) | 9,994 | 9,874 | |
Dilutive effect of stock options and restricted stock units (in shares) | [1] | 0 | 0 |
Diluted shares (in shares) | 9,994 | 9,874 | |
Antidilutive securities excluded from computation of earnings per share (shares) | 1,000 | 1,200 | |
[1] | There was no dilutive effect of stock options, restricted stock and restricted stock units for all periods presented as the impact of these items was anti-dilutive because of the Company's net loss incurred during these periods. |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2018 | Aug. 01, 2020 | Aug. 03, 2019 | |
Service Based Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation costs related to non-vested options | $ 1 | ||
Weighted-average period expected to be recognized over (years) | 7 months 6 days | ||
Expected term (years) | 5 years 2 months 12 days | 5 years 2 months 12 days | |
Risk-free interest rate | 1.50% | 2.90% | |
Expected dividend yield | 0.00% | 0.00% | |
Expected volatility | 61.70% | 47.50% | |
Market Based Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average period expected to be recognized over (years) | 1 year 9 months | ||
Expected term (years) | 7 years | ||
Risk-free interest rate | 2.30% | ||
Expected dividend yield | 0.00% | ||
Expected volatility | 56.40% | ||
Total unrecognized compensation | $ 0.6 | ||
Service Based Restricted Equity Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Service Based Restricted Equity Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||
Market Based Restricted Equity Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average period expected to be recognized over (years) | 1 year 9 months 18 days | ||
Expected term (years) | 3 years | ||
Risk-free interest rate | 2.30% | ||
Expected dividend yield | 0.00% | ||
Expected volatility | 74.20% | ||
Total unrecognized compensation | $ 0.8 | ||
Share-based Payment Arrangement, Option [Member] | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years | ||
Share-based Payment Arrangement, Option [Member] | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||
Omnibus Incentive Plan 2016, Amended | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Additional Shares Authorized (in shares) | 0.7 | ||
Number of shares authorized (in shares) | 4.2 | ||
Omnibus Incentive Plan 2016 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future grants under Stock Incentive Plan (in shares) | 1.1 |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Total Compensation Expense and Associated Income Tax Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Compensation expense | $ 4.3 | $ 11.5 |
Income tax benefit | $ 0 | $ (2.4) |
Stock Based Compensation (Weigh
Stock Based Compensation (Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted) (Details) - Service Based Stock Option - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 6.2 | $ 9.6 |
Weighted-average grant date fair value (in dollars per share) | $ 2.74 | $ 1.77 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 81.05 | $ 156 |
Expected term (years) | 5 years 2 months 12 days | 5 years 2 months 12 days |
Expected volatility | 61.70% | 47.50% |
Risk-free interest rate | 1.50% | 2.90% |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value (in dollars per share) | $ 2.74 | $ 1.77 |
Stock-Based Compensation (Sum_2
Stock-Based Compensation (Summary of Stock Option Activity Under Service-based Plans) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
May 02, 2020 | Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | ||
Service Based Stock Option | ||||||
Number of Shares | ||||||
Number of Shares, Options outstanding - Beginning | 850,400 | |||||
Number of Shares, Granted | 275,900 | |||||
Number of Shares, Exercised | 0 | |||||
Number of Shares, Cancelled/Forfeited | (443,000) | |||||
Number of Shares, Options outstanding - Ending | 683,300 | 850,400 | ||||
Number of Shares, Options vested and expected to vest at year-end | [1] | 676,600 | ||||
Number of Shares, Options exercisable at year-end | 374,200 | |||||
Weighted-Average Exercise Price | ||||||
Weighted-Average Exercise Price, Options outstanding - Beginning (in dollars per share) | $ 156 | |||||
Granted (in dollars per share) | 5.12 | |||||
Weighted-Average Exercise Price, Exercised (in dollars per share) | 0 | |||||
Weighted-Average Exercise Price, Cancelled/Forfeited (in dollars per share) | 177.66 | |||||
Weighted-Average Exercise Price, Options outstanding - Ending (in dollars per share) | $ 81.05 | $ 156 | ||||
Weighted-Average Exercise Price, Options vested and expected to vest at year-end (in dollars per share) | [1] | $ 81.75 | ||||
Weighted-Average Exercise Price, Options exercisable at year-end (in dollars per share) | $ 130.17 | |||||
Weighted-Average Remaining Contractual Terms (years) | ||||||
Weighted-Average Remaining Contractual Terms (years), Options outstanding | 4 years 7 months 6 days | 4 years 1 month 6 days | ||||
Weighted-Average Remaining Contractual Terms (years), Options vested and expected to vest at year-end | [1] | 4 years 7 months 6 days | ||||
Weighted-Average Remaining Contractual Terms (years), Options exercisable at year-end | 3 years 4 months 24 days | |||||
Aggregate Intrinsic Value | ||||||
Aggregate Intrinsic Value, Options outstanding | [2] | $ 0 | $ 0 | |||
Aggregate Intrinsic Value, Options vested and expected to vest at year-end | [1],[2] | 0 | ||||
Aggregate Intrinsic Value, Options exercisable at year-end | [2] | $ 0 | ||||
Weighted-average grant date fair value (in dollars per share) | $ 2.74 | $ 1.77 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 683,300 | 850,400 | 683,300 | 850,400 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 81.05 | $ 156 | $ 81.05 | $ 156 | ||
Weighted-Average Remaining Contractual Terms (years), Options outstanding | 4 years 7 months 6 days | 4 years 1 month 6 days | ||||
Aggregate Intrinsic Value, Options outstanding | [2] | $ 0 | $ 0 | |||
Aggregate Intrinsic Value, Options vested and expected to vest at year-end | [1],[2] | $ 0 | ||||
Weighted-Average Remaining Contractual Terms (years), Options vested and expected to vest at year-end | [1] | 4 years 7 months 6 days | ||||
Weighted-Average Exercise Price, Options vested and expected to vest at year-end (in dollars per share) | [1] | $ 81.75 | ||||
Number of Shares, Options vested and expected to vest at year-end | [1] | 676,600 | ||||
Aggregate Intrinsic Value, Options exercisable at year-end | [2] | $ 0 | ||||
Weighted-Average Remaining Contractual Terms (years), Options exercisable at year-end | 3 years 4 months 24 days | |||||
Weighted-Average Exercise Price, Options exercisable at year-end (in dollars per share) | $ 130.17 | |||||
Number of Shares, Options exercisable at year-end | 374,200 | |||||
Granted (in dollars per share) | $ 5.12 | |||||
Number of Shares, Granted | 275,900 | |||||
Weighted-Average Exercise Price, Exercised (in dollars per share) | $ 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | |||||
Weighted-Average Exercise Price, Cancelled/Forfeited (in dollars per share) | $ 177.66 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 443,000 | |||||
Weighted-average grant date fair value (in dollars per share) | $ 2.74 | $ 1.77 | ||||
Market Based Stock Options | ||||||
Weighted-Average Exercise Price | ||||||
Granted (in dollars per share) | $ 23.40 | |||||
Aggregate Intrinsic Value | ||||||
Weighted-average grant date fair value (in dollars per share) | $ 4.40 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 200,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in dollars per share) | $ 23.40 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 200,000 | |||||
Weighted-average grant date fair value (in dollars per share) | $ 4.40 | |||||
[1] | The number of options expected to vest takes into consideration estimated expected forfeitures. | |||||
[2] | The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. |
Stock-Based Compensation (Sum_3
Stock-Based Compensation (Summary of Restricted Equity Awards Activity) (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
May 02, 2020$ / sharesshares | Aug. 01, 2020USD ($)shares$ / shares | Aug. 03, 2019USD ($)$ / sharesshares | |
Restricted Stock Units (RSUs) | |||
Weighted Average Grant Date Fair Value Per Share | |||
Share Based Compensation Share Available For Future Grant Per Restricted Shares Or Units | 2.3 | ||
Market Based Restricted Equity Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | ||
Expected volatility | 74.20% | ||
Total unrecognized compensation | $ | $ 0.8 | ||
Weighted-average period expected to be recognized over (years) | 1 year 9 months 18 days | ||
Number of shares | |||
Granted (in shares) | 100,000 | ||
Weighted Average Grant Date Fair Value Per Share | |||
Granted (in dollars per share) | $ / shares | $ 9.35 | ||
Expected term (years) | 3 years | ||
Risk-free interest rate | 2.30% | ||
Service Based Restricted Equity Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation | $ | $ 0.1 | ||
Weighted-average period expected to be recognized over (years) | 2 months 12 days | ||
Number of shares | |||
Nonvested Number of shares at beginning of the year | 67,400 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | (54,200) | ||
Canceled/Forfeited (in shares) | (7,800) | ||
Nonvested Number of shares at the end of the year | 5,400 | 67,400 | |
Weighted Average Grant Date Fair Value Per Share | |||
Nonvested Weighted-Average Grant Date Fair Value at the beginning of the year (in dollars per share) | $ / shares | $ 91.42 | ||
Granted (in dollars per share) | $ / shares | 0 | $ 75 | |
Vested (in dollars per share) | $ / shares | 82.58 | ||
Canceled/Forfeited (in dollars per share) | $ / shares | 88.68 | ||
Nonvested Weighted-Average Grant Date Fair Value at the end of the year (in dollars per share) | $ / shares | $ 183.84 | $ 91.42 | |
Total fair value of awards vested | $ | $ 0.3 | $ 5.6 | |
Service Based Restricted Equity Awards | Minimum | |||
Weighted Average Grant Date Fair Value Per Share | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Service Based Restricted Equity Awards | Maximum | |||
Weighted Average Grant Date Fair Value Per Share | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2020USD ($) | Aug. 01, 2020USD ($)fund | Aug. 03, 2019USD ($) | |
Retirement Savings Plan (401 (k)) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses related to contributions and administration of plans | $ 8,000,000 | $ 15,300,000 | |
Retirement Savings Plan (401 (k)) | Discontinued Operations, Disposed of by Sale | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses related to contributions and administration of plans | $ 500,000 | 3,100,000 | |
Retirement Savings Plan (401 (k)) | First 3% | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent match | 100.00% | ||
Employee contribution percentage | 3.00% | ||
Retirement Savings Plan (401 (k)) | Next 2% | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent match | 50.00% | ||
Employee contribution percentage | 2.00% | ||
Executive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent match | 100.00% | ||
Expenses related to contributions and administration of plans | $ 2,900,000 | 1,000,000 | |
Employee contribution of base salary and bonus | 50.00% | ||
Maximum bonus contribution per employee | 75.00% | ||
Percentage of base salary and bonus salary deferred per employee | 1.00% | ||
Threshold for bonus salary deferral match on first 1% | $ 270,000 | ||
Additional matching contribution of first 5% to ERP Plan | 100.00% | ||
Percentage of base salary and bonus salary deferred per employee for additional employer matching | 5.00% | ||
Threshold for bonus salary deferral match on first 5% | $ 270,000 | ||
Incremental vesting period | 5 years | ||
Vesting percentage | 100.00% | ||
Amount of matching contributions | $ 500,000 | 1,000,000 | |
Number reference investment fund elections offered to participating employees | fund | 27 | ||
Defined contribution plan, liabilities recognized | $ 22,000,000 | 60,500,000 | |
Cash Settled LTIP Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Deferred Compensation Arrangement with Individual, Compensation Expense | $ 4,500,000 | ||
Employee Stock Purchase Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employee share purchase during each quarterly offering period, discount | 15.00% | ||
Selling, general and administrative expenses | Cash Settled LTIP Awards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Deferred Compensation Arrangement with Individual, Compensation Expense | $ (5,900,000) | 100,000 | |
Accrued expenses and other current liabilities | Executive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, liabilities recognized | 2,400,000 | 31,600,000 | |
Other non-current liabilities | Executive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, liabilities recognized | $ 13,800,000 | $ 28,900,000 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Aug. 03, 2019USD ($) | Aug. 01, 2020USD ($)segment | Aug. 03, 2019USD ($) | ||||
Segment Reporting Information [Line Items] | ||||||
Number of Operating Segments | segment | 3 | |||||
Net sales | $ 3,718.1 | $ 4,734.7 | ||||
Total operating loss | [1] | (1,113.6) | (638.3) | |||
Unallocated restructuring and other related charges | [1] | (238.3) | (94.1) | |||
Unallocated impairment of goodwill | [1] | 148.9 | 276 | |||
Unallocated impairment of other intangible assets | $ 134.9 | 128.7 | [1] | 134.9 | [1] | |
Overhead expenses | 18.3 | 170.1 | ||||
Total severance and benefit costs | 29.3 | [2] | 20.8 | [3] | ||
Impairment of retail store assets | [4] | 196.8 | 21.7 | |||
Total restructuring and other related charges | 238.3 | 94.1 | ||||
Premium Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of retail store assets | 115.3 | 2.2 | ||||
Plus Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of retail store assets | 25.2 | 17.8 | ||||
Kids Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of retail store assets | 56.3 | 1.7 | ||||
Operating Segments | Premium Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 1,852.6 | 2,415.1 | ||||
Total operating loss | [1] | (280.9) | 35.1 | |||
Operating Segments | Plus Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 1,055.9 | 1,240.5 | ||||
Total operating loss | [1] | (90.1) | (101.6) | |||
Operating Segments | Kids Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 809.6 | 1,079.1 | ||||
Total operating loss | [1] | (226.7) | (66.8) | |||
Cash-related restructuring charges | ||||||
Segment Reporting Information [Line Items] | ||||||
Unallocated restructuring and other related charges | [5] | (49) | (49.2) | |||
Total severance and benefit costs | [2],[5] | 29.3 | 16.1 | |||
Total professional fees and other related charges | [6] | 19.7 | 33.1 | [3] | ||
Professional Fees and Other Related Charges | [5] | 19.7 | 33.1 | |||
Cash-related restructuring charges | Operating Segments | Premium Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Total severance and benefit costs | [5] | 5.2 | 3.3 | |||
Cash-related restructuring charges | Operating Segments | Plus Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Total severance and benefit costs | [5] | 8.1 | 3.5 | |||
Total professional fees and other related charges | [5] | 2.4 | 0 | |||
Cash-related restructuring charges | Operating Segments | Kids Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Total severance and benefit costs | [5] | 7.9 | 1.8 | |||
Total professional fees and other related charges | [5] | 1.7 | 0 | |||
Cash-related restructuring charges | Corporate, Non-Segment | ||||||
Segment Reporting Information [Line Items] | ||||||
Total severance and benefit costs | [5] | 8.1 | 7.5 | |||
Total professional fees and other related charges | [5] | 15.6 | 33.1 | |||
Non-cash charges | ||||||
Segment Reporting Information [Line Items] | ||||||
Unallocated restructuring and other related charges | (189.3) | (44.9) | ||||
Impairment of retail store assets | [7] | 189.3 | 44.9 | |||
Non-cash charges | Operating Segments | Premium Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of retail store assets | 39.7 | 0 | ||||
Non-cash charges | Operating Segments | Plus Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of retail store assets | 43.1 | 0 | ||||
Non-cash charges | Operating Segments | Kids Fashion | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of retail store assets | 106.5 | 0 | ||||
Non-cash charges | Corporate, Non-Segment | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of retail store assets | $ 0 | $ 44.9 | ||||
[1] | (a) For Fiscal 2020 and Fiscal 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the consolidated financial statements. As a result, shared expenses of $18.3 million and $170.1 million, respectively, for the fiscal years ended August 1, 2020 and August 3, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units. | |||||
[2] | (a) Severance and benefit costs reflect severance accruals as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. | |||||
[3] | (a) Additions charged to expense for Fiscal 2019 exclude $(4.7) million of long-term incentive program expense reversals related to the announced changes to the Company's senior leadership team. | |||||
[4] | The Company incurred additional impairment charges, which are considered to be outside the Company’s typical quarterly real-estate review. These additional charges are included within Restructuring and other related charges and are more fully described in Note 8. | |||||
[5] | (1) The charges incurred under the Company's cost reduction initiatives are more fully described in Note 8. | |||||
[6] | (b) Other related charges in Fiscal 2020 consist primarily of professional fees incurred in connection with the Chapter 11 cases prior to July 23, 2020. Charges in Fiscal 2019 consist of professional fees and other third-party costs incurred in connection with the identification and implementation of transformation initiatives. | |||||
[7] | (c) Non-cash asset impairments in Fiscal 2020 primarily reflect write-offs of assets related to stores that are closing as a result of the Chapter 11 Cases. Charges in Fiscal 2019 reflect the write-down of corporate-owned office buildings in Duluth, MN and Mahwah, NJ to fair market value. |
Segments (Depreciation and Amor
Segments (Depreciation and Amortization Expense and Capital Expenditures) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | ||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense, Continuing operations | [1] | $ 232.7 | $ 280.4 |
Capital expenditures | 65.1 | 136.5 | |
Total capital expenditures | [1] | 64.9 | 129.1 |
Operating Segments | Premium Fashion | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | [1] | 112.2 | 133.9 |
Capital expenditures | [1] | 25.4 | 28.6 |
Operating Segments | Plus Fashion | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | [1] | 60.3 | 74.7 |
Capital expenditures | [1] | 4 | 8.5 |
Operating Segments | Kids Fashion | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | [1] | 60.2 | 71.8 |
Capital expenditures | [1] | 9.1 | 6.1 |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | [1],[2] | $ 26.4 | $ 85.9 |
[1] | a) Depreciation and amortization expense and capital expenditures related to the maurices and Dressbarn businesses, historically reported within the Value Fashion segment, were excluded from the tables and is classified as discontinued operations within the consolidated financial statements. Refer to Note 3. | ||
[2] | Includes capital expenditures for technology and supply chain infrastructure. |
Additional Financial Informat_3
Additional Financial Information (Cash Interest and Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 04, 2018 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash paid for interest | $ 85 | $ 97.4 | ||
Cash paid for income taxes | [1] | 9.7 | 5.9 | |
Accrued purchases of fixed assets | 9.1 | 19.3 | ||
Cash and cash equivalents | 580.4 | 323.8 | ||
Restricted Cash | 1.2 | 1.2 | ||
Total cash, cash equivalents and restricted cash | 581.6 | 329.2 | $ 240.1 | |
Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash paid for income taxes | $ 0.1 | $ 0.1 | ||
[1] | (a) Includes a net payment of $0.1 million for Fiscal 2020 and a net refund of $0.1 million for Fiscal 2019 related to the maurices and Dressbarn businesses, which are classified in discontinued operations. |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) $ in Millions | Oct. 13, 2020 | Nov. 26, 2020 | Nov. 23, 2020 |
Asset Purchase Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Purchase price | $ 540 | ||
Termination Fee | 16.2 | ||
Expense Reimbursement | 5.4 | ||
Termination Fee, Receiver | $ 54 | ||
Discontinued Operations, Disposed of by Sale | Catherines | |||
Subsequent Event [Line Items] | |||
Base Sale Price from Sale of Intangible Assets | $ 40.8 | ||
Reduction in Sale Price from Sale of Intangible Assets | $ 1.1 | ||
Discontinued Operations, Disposed of by Sale | Justice | |||
Subsequent Event [Line Items] | |||
Consideration | $ 71 |