8.  Restructuring and Management Transition

 

The composition of restructuring and management transition charges was as follows:    

 

 

   

Supply chain

As a result of consolidating and streamlining our supply chain organization as part of a restructuring program that began in 2011, during the three months ended April 28, 2012 we recorded charges of $6 million related to increased depreciation, termination benefits and unit closing costs. This restructuring activity was completed during the third quarter of 2012.

 

Home office and stores

During the three months ended May 4, 2013 and April 28, 2012, we recorded $28 million and $45 million, respectively, of charges associated with employee termination benefits for actions to reduce our store and home office expenses.    

     

Store fixtures

During the three months ended May 4, 2013, we recorded $9 million of charges for the impairment of certain store fixtures related to our former shop strategy that were used in our prototype department store and $6 million of charges for the write-off of store fixtures related to the current renovations in our home department.  In addition, we recorded $13 million of increased depreciation as a result of shortening the useful lives of fixtures in our department stores that were replaced during the quarter or are expected to be replaced during 2013 with the build out of our home department and other attractions.

 

Management transition

We implemented several changes within our management leadership team that resulted in management transition costs of $16 million and $20 million for the three months ended May 4, 2013 and April 28, 2012, respectively, for both incoming and outgoing members of management.     

    

Other

During the three months ended April 28, 2012, we recorded miscellaneous restructuring charges of $5 million primarily related to the exit of our specialty websites CLAD^TM and Gifting Grace^TM.  

 

Activity for the restructuring and management transition liability for the three months ended May 4, 2013 was as follows:

 

Non-cash amounts represent charges that do not result in cash expenditures including increased depreciation and write-off of store fixtures and stock-based compensation expense for accelerated vesting related to terminations.