Annual report pursuant to Section 13 and 15(d)

RESTRUCTURING

v3.20.1
RESTRUCTURING
 12 Months Ended
Mar. 28, 2020
Restructuring and Related Activities [Abstract]  
RESTRUCTURING RESTRUCTURING

The Company typically incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits.
Of the $31.8 million of restructuring charges recognized in the year ended March 2020, $12.4 million were reflected in selling, general and administrative expenses and $19.4 million in cost of goods sold. Of the $63.1 million of restructuring charges recognized in the year ended March 2019, $48.5 million were reflected in selling, general and administrative expenses and $14.6 million in cost of goods sold. Of the $11.5 million of restructuring charges recognized in the three months ended March 2018, $7.4 million were reflected in selling, general and administrative expenses and
$4.1 million in cost of goods sold. Of the $16.2 million of restructuring charges recognized in the year ended December 2017, $11.6 million were reflected in selling, general and administrative expenses and $4.6 million in cost of goods sold.
The Company did not recognize significant incremental costs related to the actions for the year ended March 2019 and has completed most of the related restructuring activities as of March 2020. Of the total restructuring accrual at March 2020, $40.5 million is expected to be paid out within the next 12 months and is classified within accrued liabilities. The remaining $0.4 million will be paid out beyond the next 12 months and thus is classified within other liabilities.
The components of the restructuring charges are as follows:
(In thousands)
 
Year Ended March 2020 Charges
 
 
Year Ended March 2019 Charges
 
Three Months Ended March 2018 Charges
 
Year Ended December 2017 Charges
Severance and employee-related benefits
 
$
21,899

 
 
$
46,724

 
$
11,472

 
$
11,723

Asset impairments
 
5,211

 
 
4,109

 
—

 
—

Inventory write-downs
 
1,119

 
 
2,171

 
—

 
—

Contract termination and other
 
3,618

 
 
10,092

 
—

 
4,436

Total restructuring charges
 
$
31,847

 
 
$
63,096

 
$
11,472

 
$
16,159


Restructuring costs by business segment are as follows:
(In thousands)
 
Year Ended March 2020 Charges
 
 
Year Ended March 2019 Charges
 
Three Months Ended March 2018 Charges
 
Year Ended December 2017 Charges
Outdoor
 
$
7,094

 
 
$
38,952

 
$
4,550

 
$
10,393

Active
 
3,210

 
 
13,579

 
—

 
2,400

Work
 
2,193

 
 
5,587

 
6,922

 
—

Corporate
 
19,350

 
 
4,978

 
—

 
3,366

Total
 
$
31,847

 
 
$
63,096

 
$
11,472

 
$
16,159


The activity in the restructuring accrual is as follows:
(In thousands)
 
Severance
 
Other
 
Total
 
Accrual at March 2018
 
$
27,407

 
$
444

 
$
27,851

 
Charges
 
46,724

 
10,092

 
56,816

 
Retained discontinued operations accruals
 
13,808

 
4,849

 
18,657

 
Cash payments and settlements
 
(26,054
)
 
(4,248
)
 
(30,302
)
 
Adjustments to accruals
 
(5,396
)
 
100

 
(5,296
)
 
Impact of foreign currency
 
(271
)
 
(235
)
 
(506
)
 
Accrual at March 2019
 
56,218

 
11,002

 
67,220

 
Charges
 
21,899

 
3,618

 
25,517

 
Cash payments and settlements
 
(39,728
)
 
(11,997
)
 
(51,725
)
 
Adjustments to accruals
 
2,181

 
1,159

 
3,340

 
Impact of foreign currency
 
(2,518
)
 
(894
)
 
(3,412
)
 
Accrual at March 2020
 
$
38,052

 
$
2,888

 
$
40,940

 


The Company has incurred costs associated with the relocation of VF's global headquarters and certain brands to Denver, Colorado. The total amount of charges recognized for the years ended March 2020 and 2019 were $41.5 million and $47.4 million, respectively, of which $18.8 million for the year ended March 2019 relates to severance and employee-related benefits and is included in the tables above. The remaining amounts for the years ended March 2020 and 2019 relate to other relocation costs, the majority of which have been paid.