CAPRI HOLDINGS LTD, 10-K filed on 5/26/2021
Annual Report
v3.21.1
Cover Page - USD ($)
12 Months Ended
Mar. 27, 2021
May 19, 2021
Sep. 25, 2020
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Mar. 27, 2021    
Current Fiscal Year End Date --03-27    
Document Transition Report false    
Entity File Number 001-35368    
Entity Registrant Name CAPRI HOLDINGS LTD    
Entity Incorporation, State or Country Code D8    
Entity Address, Address Line One 33 Kingsway    
Entity Address, City or Town London    
Entity Address, Country GB    
Entity Address, Postal Zip Code WC2B 6UF    
Country Region 44    
City Area Code 207    
Local Phone Number 632 8600    
Title of Each Class Ordinary Shares, no par value    
Trading Symbol(s) CPRI    
Name of Each Exchange on which Registered NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 2,831,225,962
Entity Common Stock, Shares Outstanding   151,327,019  
Documents Incorporated by Reference The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference from the Registrant’s definitive Proxy Statement, which will be filed in June 2021, for the 2021 Annual Meeting of the Shareholders.    
Amendment Flag false    
Document Fiscal Year Focus 2021    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001530721    
v3.21.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Mar. 27, 2021
Mar. 28, 2020
Current assets    
Cash and cash equivalents $ 232 $ 592
Receivables, net 373 308
Inventories, net 736 827
Prepaid expenses and other current assets 205 167
Total current assets 1,546 1,894
Property and equipment, net 485 561
Operating lease right-of-use assets 1,504 1,625
Intangible assets, net 1,992 1,986
Goodwill 1,498 1,488
Deferred tax assets 278 225
Other assets 178 167
Total assets 7,481 7,946
Current liabilities    
Accounts payable 512 428
Accrued payroll and payroll related expenses 116 93
Accrued income taxes 126 42
Short-term operating lease liabilities 447 430
Short-term debt 123 167
Accrued expenses and other current liabilities 297 241
Total current liabilities 1,621 1,401
Long-term operating lease liabilities 1,657 1,758
Deferred tax liabilities 397 465
Long-term debt 1,219 2,012
Other long-term liabilities 430 142
Total liabilities 5,324 5,778
Commitments and contingencies
Shareholders’ equity    
Ordinary shares, no par value; 650,000,000 shares authorized; 219,222,937 shares issued and 151,280,011 outstanding at March 27, 2021; 217,320,010 shares issued and 149,425,612 outstanding at March 28, 2020 0 0
Treasury shares, at cost (67,942,926 shares at March 27, 2021 and 67,894,398 shares at March 28, 2020) (3,326) (3,325)
Additional paid-in capital 1,158 1,085
Accumulated other comprehensive income 56 75
Retained earnings 4,270 4,332
Total shareholders’ equity of Capri 2,158 2,167
Noncontrolling interest (1) 1
Total shareholders’ equity 2,157 2,168
Total liabilities and shareholders’ equity $ 7,481 $ 7,946
v3.21.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 27, 2021
Mar. 28, 2020
Shareholders’ equity    
Ordinary shares, par value (in dollars per share) $ 0 $ 0
Ordinary shares, shares authorized (in shares) 650,000,000 650,000,000
Ordinary shares, shares issued (in shares) 219,222,937 217,320,010
Ordinary shares, shares outstanding (in shares) 151,280,011 149,425,612
Treasury shares (in shares) 67,942,926 67,894,398
v3.21.1
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($)
$ in Millions
12 Months Ended
Mar. 27, 2021
Mar. 28, 2020
Mar. 30, 2019
Income Statement [Abstract]      
Total revenue $ 4,060 $ 5,551 $ 5,238
Cost of goods sold 1,463 2,280 2,058
Gross profit 2,597 3,271 3,180
Selling, general and administrative expenses 2,018 2,464 2,075
Depreciation and amortization 212 249 225
Impairment of assets 316 708 21
Restructuring and other charges 32 42 124
Total operating expenses 2,578 3,463 2,445
Income (loss) from operations 19 (192) 735
Other income, net (7) (6) (4)
Interest expense, net 43 18 38
Foreign currency (gain) loss (20) 11 80
Income (loss) before provision for income taxes 3 (215) 621
Income Tax Expense (Benefit) 66 10 79
Net (loss) income (63) (225) 542
Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest (1) (2) (1)
Net (loss) income attributable to Capri $ (62) $ (223) $ 543
Weighted average ordinary shares outstanding:      
Basic (in shares) 150,453,568 150,714,598 149,765,468
Diluted (in shares) 150,453,568 150,714,598 151,614,350
Net (loss) income per ordinary share attributable to Capri:      
Basic (in dollars per share) $ (0.41) $ (1.48) $ 3.62
Diluted (in dollars per share) $ (0.41) $ (1.48) $ 3.58
Statements of Comprehensive (Loss) Income:      
Net (loss) income $ (63) $ (225) $ 542
Foreign currency translation adjustments (15) 145 (134)
Net (loss) gain on derivatives (4) (4) 17
Comprehensive (loss) income (82) (84) 425
Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest (1) (2) (1)
Comprehensive (loss) income attributable to Capri $ (81) $ (82) $ 426
v3.21.1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
$ in Millions
Total
Cumulative Effect, Period of Adoption, Adjustment
Cumulative Effect, Period of Adoption, Adjusted Balance
Total Equity of Capri
Total Equity of Capri
Cumulative Effect, Period of Adoption, Adjustment
Total Equity of Capri
Cumulative Effect, Period of Adoption, Adjusted Balance
Ordinary Shares
Ordinary Shares
Cumulative Effect, Period of Adoption, Adjusted Balance
Additional Paid-in Capital
Additional Paid-in Capital
Cumulative Effect, Period of Adoption, Adjusted Balance
Treasury Shares
Treasury Shares
Cumulative Effect, Period of Adoption, Adjusted Balance
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Cumulative Effect, Period of Adoption, Adjusted Balance
Retained Earnings
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings
Cumulative Effect, Period of Adoption, Adjusted Balance
Non-controlling Interests
Non-controlling Interests
Cumulative Effect, Period of Adoption, Adjusted Balance
Beginning balance (in shares) at Mar. 31, 2018             210,991,000                        
Beginning balance at Mar. 31, 2018 $ 2,034     $ 2,030     $ 0   $ 831   $ (3,016)   $ 51   $ 4,164     $ 4  
Beginning balance, treasury (in shares) at Mar. 31, 2018                     (61,293,000)                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Net (loss) income 542     543                     543     (1)  
Other comprehensive income (loss) (117)     (117)                 (117)         0  
Comprehensive (loss) income 425     426                           (1)  
Issuance of ordinary shares (in shares)             2,395,000                        
Issuance of ordinary shares 91     91         91                    
Vesting of restricted awards, net of forfeitures (in shares)             818,000                        
Exercise of employee share options (in shares)             1,847,000                        
Exercise of employee share options 29     29         29                    
Share based compensation expense 60     60         60                    
Repurchase of common stock (in shares)                     (3,826,000)                
Repurchase of common stock (207)     (207)             $ (207)                
Ending balance (in shares) at Mar. 30, 2019             216,051,000                        
Ending balance at Mar. 30, 2019 2,432 $ (152) $ 2,280 2,429 $ (152) $ 2,277 $ 0 $ 0 1,011 $ 1,011 $ (3,223) $ (3,223) (66) $ (66) 4,707 $ (152) $ 4,555 3 $ 3
Ending balance, treasury (in shares) at Mar. 30, 2019                     (65,119,000)                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Net (loss) income (225)     (223)                           (2)  
Other comprehensive income (loss) 141     141                 141         0  
Comprehensive (loss) income (84)     (82)                           (2)  
Vesting of restricted awards, net of forfeitures (in shares)             1,262,000                        
Exercise of employee share options (in shares)             7,000                        
Exercise of employee share options 0                                    
Share based compensation expense 70     70         70                    
Repurchase of common stock (in shares)                     (2,775,000)                
Repurchase of common stock (102)     (102)             $ (102)                
Adjustment of redeemable non-controlling interests to redemption value $ 4     4         4                    
Ending balance (in shares) at Mar. 28, 2020 217,320,010           217,320,000                        
Ending balance at Mar. 28, 2020 $ 2,168     2,167     $ 0   1,085   $ (3,325)   75   4,332     1  
Ending balance, treasury (in shares) at Mar. 28, 2020 (67,894,398)                   (67,894,000)                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                      
Net (loss) income $ (63)     (62)                     (62)     (1)  
Other comprehensive income (loss) (19)     (19)                 (19)         0  
Comprehensive (loss) income (82)     (81)                           (1)  
Vesting of restricted awards, net of forfeitures (in shares)             1,456,000                        
Exercise of employee share options (in shares)             447,000                        
Exercise of employee share options 3     3         3                    
Share based compensation expense 70     70         70                    
Repurchase of common stock (in shares)                     (49,000)                
Repurchase of common stock (1)     (1)             $ (1)                
Other $ (1)                                 (1)  
Ending balance (in shares) at Mar. 27, 2021 219,222,937           219,223,000                        
Ending balance at Mar. 27, 2021 $ 2,157     $ 2,158     $ 0   $ 1,158   $ (3,326)   $ 56   $ 4,270     $ (1)  
Ending balance, treasury (in shares) at Mar. 27, 2021 (67,942,926)                   (67,943,000)                
v3.21.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
12 Months Ended
Mar. 27, 2021
Mar. 28, 2020
Mar. 30, 2019
Cash flows from operating activities      
Net (loss) income $ (63) $ (225) $ 542
Adjustments to reconcile net (loss) income to net cash provided by operating activities:      
Depreciation and amortization 212 249 225
Share-based compensation expense 71 70 60
Impairment of assets 316 708 21
Credit loss (3) 29 4
Losses on store lease exits 0 0 18
Deferred income taxes (70) (73) (71)
Changes to lease related balances, net (112) (55)  
Amortization of deferred financing costs 6 8 4
Tax deficit (benefit) on exercise of share options 4 2 (24)
Foreign currency (gains) losses (15) 11 80
Other non-cash charges 0 3 0
Change in assets and liabilities:      
Receivables, net (52) 42 (23)
Inventories, net 145 115 (125)
Prepaid expenses and other current assets (31) 20 (31)
Accounts payable 50 63 (48)
Accrued expenses and other current liabilities 153 (95) 20
Other long-term assets and liabilities 13 (13) 42
Net cash provided by operating activities 624 859 694
Cash flows from investing activities      
Capital expenditures (111) (223) (181)
Purchase of intangible assets 0 0 (3)
Cash paid for asset/business acquisitions, net of cash acquired (13) (13) (1,875)
Realized loss on hedge related to acquisitions 0 0 (77)
Settlement of net investment hedges 0 298 11
Net cash (used in) provided by investing activities (124) 62 (2,125)
Cash flows from financing activities      
Debt borrowings 2,443 2,282 4,204
Debt repayments (3,311) (2,676) (2,560)
Debt issuance costs (4) (1) (15)
Repurchase of common stock (1) (102) (207)
Exercise of employee share options 3 0 29
Net cash (used in) provided by financing activities (870) (497) 1,451
Effect of exchange rate changes on cash and cash equivalents 12 (4) (11)
Net (decrease) increase in cash, cash equivalents and restricted cash (358) 420 9
Beginning of period 592 172 163
End of period 234 592 172
Supplemental disclosures of cash flow information      
Cash paid for interest 52 80 45
Cash paid for income taxes 45 98 172
Supplemental disclosure of non-cash investing and financing activities      
Accrued capital expenditures $ 17 $ 30 $ 25
v3.21.1
Business and Basis of Presentation
12 Months Ended
Mar. 27, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business and Basis of Presentation Business and Basis of Presentation
The Company was incorporated in the British Virgin Islands (“BVI”) on December 13, 2002 as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited (“Capri,” and together with its subsidiaries, the “Company”) on December 31, 2018. The Company is a holding company that owns brands that are leading designers, marketers, distributors and retailers of branded women’s and men’s accessories, apparel and footwear bearing the Versace, Jimmy Choo and Michael Kors tradenames and related trademarks and logos. The Company operates in three reportable segments: Versace, Jimmy Choo and Michael Kors. See Note 20 for additional information.
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned or controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
The Company utilizes a 52 to 53 week fiscal year, and the term "Fiscal Year" or "Fiscal" refers to that 52-week or 53-week period. The fiscal years ending on March 27, 2021, March 28, 2020 and March 30, 2019 (“Fiscal 2021”, “Fiscal 2020” and “Fiscal 2019”, respectively) contain 52 weeks. The Company’s Fiscal 2022 is a 53-week period ending April 2, 2022.
v3.21.1
Summary of Significant Accounting Policies
12 Months Ended
Mar. 27, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and credit losses, estimates of inventory net realizable value, the valuation of share-based compensation, the valuation of deferred taxes and the valuation of goodwill, intangible assets, operating lease right-of-use assets and property and equipment, along with the estimated useful lives assigned to these assets. Actual results could differ from those estimates.
Seasonality
The Company experiences certain effects of seasonality with respect to its business. The Company generally experiences greater sales during its third fiscal quarter, primarily driven by holiday season sales, and the lowest sales during its first fiscal quarter.
Revenue Recognition
The Company accounts for contracts with its customers when there is approval and commitment from both parties, the rights of the parties and payment terms have been identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised goods or services is transferred to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. The Company recognizes retail store revenues when control of the product is transferred at the point of sale at Company owned stores, including concessions, net of estimated returns. Revenue from sales through the Company’s e-commerce sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, after merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers. To arrive at net sales for retail revenue, gross sales are reduced by actual customer returns as well as by a provision for estimated future customer returns, which is based on management’s review of historical and future customer return expectations. Sales taxes collected from retail customers are presented on a net basis and, as such, are excluded from revenue. To arrive at net sales for wholesale revenue, gross sales are reduced by provisions for estimated future returns, based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. These estimates are based on such factors as
historical trends, actual and forecasted performance and current market conditions, which are reviewed by management on a quarterly basis.
The following table details the activity and balances of the Company’s sales reserves for the fiscal years ended March 27, 2021, March 28, 2020, and March 30, 2019 (in millions):
Balance
Beginning
of Year
Amounts
Charged to
Revenue
Write-offs
Against
Reserves
Balance
at
Year End
Retail
Return Reserves:
Fiscal Year Ended March 27, 2021$12 $176 $(168)$20 
Fiscal Year Ended March 28, 202015 231 (234)12 
Fiscal Year Ended March 30, 201912 226 (223)15 

 Balance
Beginning
of Year
Amounts
Charged to
Revenue
Write-offs
Against
Reserves
Balance
at
Year End
Wholesale
Total Sales Reserves:
Fiscal Year Ended March 27, 2021$154 $137 $(213)$78 
Fiscal Year Ended March 28, 2020112 266 (224)154 
Fiscal Year Ended March 30, 2019109 262 (259)112 
Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported sales of licensed products bearing the Company’s trademarks at rates specified in the license agreements. These agreements are also subject to contractual minimum levels. Royalty revenue generated by geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as outlined in the agreements. These agreements allow for the use of the Company’s tradenames to sell its branded products in specific geographic regions.
The adverse impact from the COVID-19 pandemic which includes, but is not limited to, temporary retail store closures, wholesale customer store closures, a reduction in retail store traffic, a decline in international tourism and a decrease in consumer consumption is reflected in the Company's Fiscal 2021 and Fiscal 2020 total revenue.
Loyalty Program
The Company offers a loyalty program, which allows its Michael Kors U.S. customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at Michael Kors retail stores and e-commerce sites. The Company defers a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of an estimated “breakage,” is recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets and is expected to be recognized within the next 12 months. See Note 3 for additional information.
Advertising and Marketing Costs
Advertising and marketing costs are generally expensed when the advertisement is first exhibited and are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive (loss) income. Advertising and marketing expense was $137 million, $201 million and $158 million in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
Cooperative advertising expense, which represents the Company’s participation in advertising expenses of its wholesale customers, is reflected as a reduction of net sales. Expenses related to cooperative advertising for Fiscal 2021, Fiscal 2020 and Fiscal 2019, were $3 million, $7 million and $8 million, respectively.
Shipping and Handling
Freight-in expenses are recorded as part of cost of goods sold, along with product costs and other costs to acquire inventory. The costs of preparing products for sale, including warehousing expenses, are included in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive (loss) income. Selling, general and administrative expenses also include the costs of shipping products to the Company’s e-commerce customers. Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive (loss) income were $160 million, $157 million and $132 million for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. Shipping and handling costs charged to customers are included in total revenue.
COVID-19 Related Government Assistance and Subsidies
As there is no definitive guidance under U.S. GAAP, the Company has applied the guidance under International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance ("IAS 20"). The Company has elected to follow the income approach under IAS 20 and recognize these funds as a reduction to the related expense in the Company’s consolidated statements of operations and comprehensive (loss) income. During Fiscal 2021, the Company recognized $37 million related to government assistance and subsidies.
Cash, Cash Equivalents and Restricted Cash
All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Included in the Company’s cash and cash equivalents as of March 27, 2021 and March 28, 2020 are credit card receivables of $25 million and $4 million, respectively, which generally settle within two to three business days. The increase in credit card receivables year over year is mainly due to the impact on sales from COVID-19.
A reconciliation of cash, cash equivalents and restricted cash as of March 27, 2021 and March 28, 2020 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:
 Fiscal Years Ended
 March 27,
2021
March 28,
2020
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$232 $592 
Restricted cash included within prepaid expenses and other current assets— 
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows$234 $592 
Inventories
Inventories primarily consist of finished goods with the exception of raw materials and work in process inventory. The combined total of raw materials and work in process inventory recorded on the Company's consolidated balance sheets as of March 27, 2021 and March 28, 2020 were $28 million and $27 million, respectively. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted-average cost method. Costs include amounts paid to independent manufacturers, plus duties and freight to bring the goods to the Company’s warehouses, as well as shipments to stores. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The net realizable value of the Company’s inventory is estimated based on historical experience, current and forecasted demand, and market conditions. In addition, reserves for inventory losses are estimated based on historical experience and physical inventory counts. The Company’s inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations. Our historical estimates of these adjustments have not differed materially from actual results.
The net realizable value of the Company's inventory as of March 27, 2021 and March 28, 2020 includes the adverse impacts connected to the COVID-19 pandemic. This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, a decline in international tourism and a decrease in consumer consumption.
Store Pre-opening Costs
Costs associated with the opening of new retail stores and start up activities, are expensed as incurred.
Property and Equipment
Property and equipment is stated at cost less accumulated depreciation and amortization (carrying value). Depreciation is recorded on a straight-line basis over the expected remaining useful lives of the related assets. Equipment, furniture and fixtures, are depreciated over five to seven years, computer hardware and software are depreciated over three to five years. The Company’s share of the cost of constructing in-store shop displays within its wholesale customers’ floor-space (“shop-in-shops”), which is paid directly to third-party suppliers, is capitalized as property and equipment and is generally amortized over a useful life of three to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated remaining useful lives of the related assets or the remaining lease term, including highly probable renewal periods. The Company includes all depreciation and amortization expense as a component of total operating expenses, as the underlying long-lived assets are not directly or indirectly related to bringing the Company’s products to their existing location and condition. Maintenance and repairs are charged to expense in the year incurred.
The Company capitalizes, in property and equipment, direct costs incurred during the application development stage and the implementation stage for developing, purchasing or otherwise acquiring software for its internal use. These costs are amortized over the estimated useful lives of the software, generally five years. All costs incurred during the preliminary project stage, including project scoping and identification and testing of alternatives, are expensed as incurred.
Definite-Lived Intangible Assets
The Company’s definite-lived intangible assets consist of trademarks and customer relationships which are stated at cost less accumulated amortization. The Company’s customer relationships are amortized over five to eighteen years. Reacquired rights recorded in connection with the acquisition of Michael Kors (HK) Limited and Subsidiaries (“MKHKL”) are amortized through March 31, 2041, the original expiration date of the Michael Kors license agreement in the Greater China region. The trademark for the Michael Kors brand is amortized over twenty years.
Long-lived Assets
The Company evaluates all long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. For the purposes of impairment testing, the Company groups long-lived assets at the lowest level of identifiable cash flow. The leasehold improvements are typically amortized over the life of the store lease, including reasonably assured renewals and the shop-in-shops are amortized over a useful life of three or four years. The Company's impairment testing is based on its best estimate of the future operating cash flows. If the sum of our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, the Company would recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset. The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of real estate market fair values. As such, these estimates may differ from actual results and are affected by future market and economic conditions.
During Fiscal 2021, Fiscal 2020 and Fiscal 2019, the Company recorded impairment charges of $158 million, $357 million and $21 million, respectively, which were primarily related to operating lease right-of-use assets and fixed assets of our retail store locations. Please refer to Note 8, Note 9 and Note 14 for additional information.
Goodwill and Other Indefinite-lived Intangible Assets
The Company records intangible assets based on their fair value on the date of acquisition. Goodwill is recorded as the difference between the fair value of the purchase consideration and the fair value of the net identifiable tangible and intangible assets acquired. The brand intangible assets recorded in connection with the acquisitions of Versace and Jimmy Choo were determined to be indefinite-lived intangible assets, which are not subject to amortization. The Company performs an impairment assessment of goodwill, as well as the Versace brand and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill, the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.
The Company may assess its goodwill and its brand intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, the Company assesses various factors, including industry and market conditions, macroeconomic conditions and performance of its businesses. If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis is performed to determine if impairment is required. The Company may also elect to perform a quantitative analysis of goodwill and its indefinite-lived intangible assets initially rather than using a qualitative approach.
The impairment testing for goodwill is performed at the reporting unit level. The Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management and, in certain instances, it engages independent third-party valuation specialists. To determine the fair value of a reporting unit, the Company uses a combination of the income and market approaches, when applicable. The Company believes the blended use of both models, when applicable, compensates for the inherent risk associated with either model if used on a stand-alone basis, and this combination is indicative of the factors a market participant would consider when performing a similar valuation. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. These valuations are affected by certain estimates, including future revenue growth rates, future operating expense growth rates, gross margins and discount rates. Future events could cause us to conclude that impairment indicators exist, and goodwill may be impaired.
When performing a quantitative impairment assessment of our brand intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the "relief from royalty" method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset. This approach is dependent on many factors, including estimates of future revenue growth rates, royalty rates and discount rates. Actual future results may differ from these estimates. An impairment loss is recognized when the estimated fair value of the brand intangible assets is less than its carrying amount.
During the fourth quarter of Fiscal 2021, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for each brand. Based on qualitative impairment assessment of the Michael Kors reporting units, the Company concluded that it is more likely than not that the fair value of the Michael Kors reporting units exceeded its carrying value and, therefore, was not impaired. The Company elected to perform quantitative impairment analysis for both the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair values of each brands' reporting units. The Company also elected to perform an impairment analysis for both the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values. Based on the results of these assessments, the Company determined there was no impairment loss for the Jimmy Choo retail reporting unit as its fair value is approximately 3% higher than the carrying value, which has a goodwill balance of $221 million. The Company also concluded that the fair values of the Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required. The fair value of the Versace retail reporting unit, Versace wholesale reporting unit and Versace licensing reporting unit are at least 20% higher than their respective carrying values. The fair value of the Versace retail brand and Versace wholesale brand are more than 10% higher than their respective carrying values.
However, the Company concluded that the fair values of the Jimmy Choo wholesale and Jimmy Choo licensing reporting units, along with the Jimmy Choo brand intangible assets, did not exceed their related carrying amounts. These impairment charges were primarily related to higher discount rates in the current year driven by a change in market factors as well as a shift in expected revenue and earnings mix to the retail segment.
Accordingly, the Company recorded impairment charges of $94 million related to the Jimmy Choo wholesale and Jimmy Choo licensing reporting units and $69 million related to the Jimmy Choo brand intangible assets during Fiscal 2021. The Company recorded impairment charges of $171 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $180 million related to the Jimmy Choo brand intangible assets during Fiscal 2020. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive (loss) income for the fiscal years ended March 27, 2021 and March 28, 2020. The Company did not incur any impairment charges in Fiscal 2019. See Note 9 for information relating to its annual impairment analysis performed during the fourth quarter of Fiscal 2021, Fiscal 2020 and Fiscal 2019.
It is possible that the Company's conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) the Company's businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) discount rates change, (v) market multiples change or (vi) the identification of the Company's reporting units change, among other factors. Such changes could result in a future impairment charge of goodwill or other indefinite-lived intangible assets.
Insurance
The Company uses a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation and employee-related health care benefits. The Company also maintains stop-loss coverage with third-party insurers to limit its exposure arising from claims. Self-insurance claims filed and claims incurred but not reported are accrued based upon management’s estimates of the discounted cost for self-insured claims incurred using actuarial assumptions, historical loss experience, actual payroll and other data. Although the Company believes that it can reasonably estimate losses related to these claims, actual results could differ from these estimates.
The Company also maintains other types of customary business insurance policies, including general liability, marine transport and inventory and business interruption insurance. Insurance recoveries represent gain contingencies and are recorded upon actual settlement with the insurance carrier.
Share-based Compensation
The Company grants share-based awards to certain employees and directors of the Company. The grant date fair value of share options is calculated using the Black-Scholes option pricing model. The Company uses its own historical experience in determining the expected holding period and volatility of its time-based share option awards. The risk-free interest rate is derived from the zero-coupon United States (“U.S.”) Treasury Strips yield curve based on the grant’s estimated holding period. Determining the grant date fair value of share-based awards requires considerable judgment, including estimating expected volatility, expected term and risk-free rate. If factors change and the Company employs different assumptions, the fair value of future awards and the resulting share-based compensation expense may differ significantly from what the Company has estimated in the past.
The closing market price of the Company’s shares on the date of grant is used to determine the grant date fair value of restricted shares, time-based restricted stock units (“RSUs") and performance-based RSUs. These fair values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.
Foreign Currency Translation and Transactions
The financial statements of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. The Company’s functional currency is the United States Dollar (“USD”) for Capri and its United States based subsidiaries. Assets and liabilities are translated using period-end exchange rates, while revenues and expenses are translated using average exchange rates over the reporting period. The resulting translation adjustments are recorded separately in shareholders’ equity as a component of accumulated other comprehensive (loss) income. Foreign currency income and losses resulting from the re-measuring of transactions denominated in a currency other than the functional currency of a particular entity are included in foreign currency (gain) loss on the Company’s consolidated statements of operations and comprehensive (loss) income.
Derivative Financial Instruments
Forward Foreign Currency Exchange Contracts
The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain transactions. The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.
In connection with the September 24, 2018 definitive agreement to acquire all of the outstanding shares of Versace, the Company entered into forward foreign currency exchange contracts with notional amounts totaling €1.680 billion (approximately $2.001 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition, which were settled on December 21, 2018. This derivative contract was not designated as an accounting hedge. Therefore, changes in fair value were recorded to foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive (loss) income. The Company’s accounting policy is to classify cash flows from derivative instruments in the same category as the cash flows from the items being hedged. Accordingly, the Company classified $77 million of realized losses relating to this derivative instrument within cash flows from investing activities during Fiscal 2019.
The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including description of the hedged item and the hedging instrument and the risk being hedged. The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income (loss) until the hedged item affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive (loss) income. The Company classifies cash flows relating to its forward foreign currency exchange contracts related to purchase of inventory consistently with the classification of the hedged item, within cash flows from operating activities.
The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, the Company only enters into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge.
Net Investment Hedges
The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its U.S. Dollars and these foreign currencies. The Company has elected the spot method of designating these contracts under ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” and has designated these contracts as net investment hedges. The net gain or (loss) on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest expense in the Company’s consolidated statements of operations and comprehensive (loss) income. Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.
During the fourth quarter of Fiscal 2020, the Company terminated all of its net investment hedges related to its Euro-denominated subsidiaries. The early termination of these hedges resulted in the Company receiving $296 million in cash during the fourth quarter of Fiscal 2020. During Fiscal 2021, the Company resumed its normal hedging program and entered into multiple fixed-to-fixed cross-currency swap agreements to hedge its net investment in Euro-denominated and Japanese Yen-denominated subsidiaries against future volatility in the exchange rate between the U.S. Dollar and these currencies.
Interest Rate Swap Agreements
The Company also uses interest rate swap agreements to hedge the variability of its cash flows resulting from floating interest rates on the Company’s borrowings. When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income (loss) and are reclassified into interest expense in the same period during which the hedged transactions affect earnings.
Income Taxes
Deferred income tax assets and liabilities have been provided for temporary differences between the tax bases and financial reporting bases of the Company’s assets and liabilities using the tax rates and laws in effect for the periods in which the differences are expected to reverse. The Company periodically assesses the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or estimates and judgments used.
Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. The Company periodically reviews the recoverability of its deferred tax assets and provides valuation allowances, as deemed necessary, to reduce deferred tax assets to amounts that more-likely-than-not will be realized. The Company’s management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. Deferred tax assets could be reduced in the future if the Company’s estimates of taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.
The Company recognizes the impact of an uncertain income tax position taken on its income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. The tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments for those positions. The Company records interest expense and penalties payable to relevant tax authorities as income tax expense.
Leases
On March 31, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet for all leases, except certain short-term leases. The Company adopted the new standard recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods.
The Company leases retail stores, office space and warehouse space under operating lease agreements that expire at various dates through September 2043. The Company’s leases generally have terms of up to 10 years, generally require a fixed annual rent and may require the payment of additional rent if store sales exceed a negotiated amount. Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through November 2024. The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its restructuring initiatives, as defined in Note 11. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. The Company determines the sublease term based on the date it provides possession to the subtenant through the expiration date of the sublease.
The Company recognizes operating lease right-of-use assets and lease liabilities at lease commencement date, based on the present value of fixed lease payments over the expected lease term. The Company uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable for the Company’s leases. The Company’s incremental borrowing rates are based on the term of the leases, the economic environment of the leases and reflect the expected interest rate it would incur to borrow on a secured basis. Certain leases include one or more renewal options, generally for the same period as the initial term of the lease. The exercise of lease renewal options is generally at the Company’s sole discretion and as such, the Company typically determines that exercise of these renewal options is not reasonably certain. As a result, the Company generally does not include the renewal option period in the expected lease term and the associated lease payments are not included in the measurement of the operating lease right-of-use asset and lease liability. Certain leases also contain termination options with an associated penalty. Generally, the Company is reasonably certain not to exercise these options and as such, they are not
included in the determination of the expected lease term. The Company recognizes operating lease expense on a straight-line basis over the lease term.
Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for its short-term leases on a straight-line basis over the lease term.
The Company’s leases generally provide for payments of non-lease components, such as common area maintenance, real estate taxes and other costs associated with the leased property. The Company accounts for lease and non-lease components of its real estate leases together as a single lease component and, as such, includes fixed payments of non-lease components in the measurement of the operating lease right-of-use assets and lease liabilities for its real estate leases. Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property, are expensed as incurred as variable lease costs and are not recorded on the balance sheet. The Company’s lease agreements do not contain any material residual value guarantees or material restrictions or covenants.
Debt Issuance Costs and Unamortized Discounts
The Company defers debt issuance costs directly associated with acquiring third party financing. These debt issuance costs and any discounts on issued debt are amortized on a straight-line basis, which approximates the effective interest method, as interest expense over the term of the related indebtedness. Deferred financing fees associated with the Company’s Revolving Credit Facilities are primarily recorded within other assets in the Company’s consolidated balance sheets. Deferred financing fees and unamortized discounts associated with the Company’s other borrowings are primarily recorded as an offset to long-term debt in the Company’s consolidated balance sheets. See Note 12 for additional information.
Net (Loss) Income per Share
The Company’s basic net (loss) income per ordinary share is calculated by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period. Diluted net (loss) income per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and RSUs, were exercised or converted into ordinary shares. These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. Performance-based RSUs are included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.
The components of the calculation of basic net (loss) income per ordinary share and diluted net (loss) income per ordinary share are as follows (in millions, except share and per share data):
 Fiscal Years Ended
 March 27,
2021
March 28,
2020
March 30,
2019
Numerator:
Net (loss) income attributable to Capri$(62)$(223)$543 
Denominator:
Basic weighted average shares150,453,568 150,714,598 149,765,468 
Weighted average dilutive share equivalents:
Share options and restricted stock units, and performance restricted stock units— — 1,848,882 
Diluted weighted average shares150,453,568 150,714,598 151,614,350 
Basic net (loss) income per share (1)
$(0.41)$(1.48)$3.62 
Diluted net (loss) income per share (1)
$(0.41)$(1.48)$3.58 

(1)Basic and diluted net (loss) income per share are calculated using unrounded numbers.
Share equivalents of 3,658,959 shares, 3,752,560 shares and 1,409,415 shares, for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively, have been excluded from the above calculation due to their anti-dilutive effect.
Diluted net loss per share attributable to Capri for Fiscal 2021 and Fiscal 2020 excluded all potentially dilutive securities because there was a net loss attributable to Capri for the period and, as such, the inclusion of these securities would have been anti-dilutive.
Noncontrolling Interest
The Company has an ownership interest in the Michael Kors Latin American joint venture, MK (Panama) Holdings, S.A. and subsidiaries of 75%, an ownership interest in the Jimmy Choo EMEA joint venture JC Gulf Trading LLC of 49%, an ownership interest in the Jimmy Choo Macau joint venture J. Choo (Macau) Co. Limited of 70%, and a 50% ownership interest in J. Choo Russia J.V. Limited and its subsidiary.
Recently Adopted Accounting Pronouncements
Measurement of Credit Losses on Financial Instruments
On March 29, 2020, the Company adopted ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which amends the guidance on measuring credit losses for certain financial assets measured at amortized cost, including trade receivables. The Financial Accounting Standards Board has subsequently issued several updates to the standard, providing additional guidance on certain topics covered by the standard. This update requires entities to recognize an allowance for credit losses using a forward-looking expected loss impairment model, taking into consideration historical experience, current conditions and supportable forecasts that impact collectability. The adoption of this update did not have a material impact on the Company’s consolidated financial statements.
Implementation Costs Associated with Cloud Computing Arrangements
On March 29, 2020, the Company adopted ASU No. 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" ("ASU 2018-15"), which provides guidance related to the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The adoption of this update did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
The Company has considered all new accounting pronouncements and, other than the recent pronouncements discussed below, have concluded that there are no new pronouncements that may have a material impact on the Company’s results of operations, financial condition or cash flows based on current information
Reference Rate Reform
In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" and in January 2021, issued ASU 2021-01, "Reference Rate Reform: Scope". Both of these updates aim to ease the potential burden in accounting for reference rate reform. These updates provide optional expedients and exceptions, if certain criteria are met, for applying accounting principles generally accepted in the United States to contract modifications, hedging relationships and other transactions affected by the expected market transition from the London interbank offered rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The amendments were effective upon issuance and allow companies to adopt the amendments on a prospective basis through December 31, 2022. The Company is currently evaluating the impact of these updates on its consolidated financial statements.
v3.21.1
Revenue Recognition
12 Months Ended
Mar. 27, 2021
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company accounts for contracts with its customers when there is approval and commitment from both parties, the rights of the parties and payment terms have been identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services.
The Company sells its products through three primary channels of distribution: retail, wholesale and licensing. Within the retail and wholesale channels, substantially all of the Company’s revenues consist of sales of products that represent a single performance obligation, where control transfers at a point in time to the customer. For licensing arrangements, royalty and advertising revenue is recognized over time based on access provided to the Company’s brands.
The Company has chosen to apply the practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations that have an expected duration of 12 months or less.
Retail
The Company generates sales through directly operated stores and e-commerce throughout the Americas (U.S., Canada and Latin America), EMEA (Europe, Middle East and Africa) and certain parts of Asia (including Australia). Retail revenue is recognized when control of the product is transferred at the point of sale at Company owned stores, including concessions. For e-commerce transactions, control is transferred and revenue is recognized when products are delivered to the customer, net of estimated returns. To arrive at net sales for retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns.
Sales tax collected from retail customers are presented on a net basis and, as such, are excluded from revenue. Shipping and handling costs that are billed to customers are included in net sales, with the related costs recorded in cost of goods sold. Shipping and handling costs that are not billed to customers are accounted for as fulfillment costs.
Gift Cards. The Company sells gift cards that can be redeemed for merchandise, resulting in a contract liability upon issuance. Revenue is recognized when the gift card is redeemed or upon “breakage” for the estimated portion of gift cards that are not expected to be redeemed. “Breakage” revenue is calculated under the proportional redemption methodology, which considers the historical patterns of redemption in jurisdictions where the Company is not required to remit the value of the unredeemed gift cards as unclaimed property. The Company anticipates that substantially all of its outstanding gift cards will be redeemed within the next 12 months. The contract liability related to gift cards, net of estimated “breakage,” was $12 million and $11 million as of March 27, 2021 and March 28, 2020, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets.
Loyalty Program. The Company offers a loyalty program, which allows its Michael Kors U.S. customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at Michael Kors retail stores and e-commerce sites. The Company defers a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed.
Wholesale
The Company’s products are sold primarily to major department stores, specialty stores and travel retail shops throughout the Americas, EMEA and Asia. The Company also has arrangements where its products are sold to geographic licensees in certain parts of EMEA, Asia and South America. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, when merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers. To arrive at net sales for wholesale, gross sales are reduced by provisions for estimated future returns, as well as trade discounts, markdowns, allowances, operational chargebacks and certain cooperative selling expenses. These estimates are developed based on historical trends, actual and forecasted performance and market conditions, and are reviewed by management on a quarterly basis. Unfulfilled, non-cancelable purchase orders for products from wholesale customers (including the Company’s geographic licensees) are expected to be fulfilled within the next 12 months.
Licensing
The Company provides its third-party licensees with the right to access its Versace, Jimmy Choo and Michael Kors trademarks under product and geographic licensing arrangements. Under product licensing arrangements, the Company allows third parties to manufacture and sell luxury goods, including watches and jewelry, fragrances, eyewear and home furnishings, using the Company’s trademarks. Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa and certain parts of Asia.
The Company recognizes royalty revenue and advertising contributions based on the percentage of sales made by the licensees. Advertising contributions are received to support the Company’s branded advertising and marketing campaigns and are viewed as part of a single performance obligation with the right to access the Company’s trademarks. Royalty revenue generated from licenses, which includes contributions for advertising, may be subject to contractual minimum levels, as defined in the contract. Such minimums are generally fixed annually, based on the previous year’s sales. Licensing revenue is based on reported current period sales of licensed products at rates that are specified in the license agreements for contracts that are expected to exceed the related guaranteed minimums. If the Company expects the minimum guaranteed amounts to exceed amounts calculated based on actual sales, the guaranteed minimums are recognized ratably over the contractual year to which they relate. Generally the Company’s guaranteed minimum royalty amounts due from licensees relate to contractual periods that do not exceed 12 months, however, some of our guaranteed minimums for Versace are multi-year based. As of March 27, 2021, contractually guaranteed minimum fees from the Company's license agreements expected to be recognized as revenue during future periods were as follows (in millions):
Contractually Guaranteed Minimum Fees
Fiscal 2022$29 
Fiscal 202325 
Fiscal 202422 
Fiscal 202518 
Fiscal 202619 
Fiscal 2027 and thereafter71 
 Total
$184 
Sales Returns
For the sale of goods with a right of return, the Company recognizes revenue for the consideration to which it expects to be entitled and a refund liability for the amount it expects to refund to its customers within accrued expenses and other current liabilities. The refund liability is estimated based on management’s review of historical and current customer returns for its retail and wholesale customers, estimated future returns, adjusted for non-resalable products. The Company also considers its product strategies, as well as the financial condition of its customers, store closings by wholesale customers, changes in the retail environment and other macroeconomic factors. The Company recognizes an asset with a corresponding adjustment to cost of sales for the right to recover the products from its retail and wholesale customers. The refund liability recorded as of March 27, 2021 and March 28, 2020 was $46 million and $37 million, respectively, and the related asset for the right to recover returned product as of March 27, 2021 and March 28, 2020 was $14 million and $14 million, respectively.
Contract Balances
The Company’s contract liabilities are recorded within accrued expenses and other current liabilities and other long-term liabilities in its consolidated balance sheets depending on the short- or long-term nature of the payments to be recognized. The Company’s contract liabilities primarily consist of gift card liabilities, loyalty program liabilities and advanced payments from product licensees. Total contract liabilities were $18 million and $22 million as of March 27, 2021 and March 28, 2020, respectively. During Fiscal 2021 and Fiscal 2020, the Company recognized $9 million and $20 million in revenue, respectively, relating to contract liabilities that existed at March 28, 2020 and March 30, 2019, respectively. There were no material contract assets recorded as of March 27, 2021 and March 28, 2020.
There were no changes in historical variable consideration estimates that were materially different from actual results.
Disaggregation of Revenue
The following table presents the Company’s segment revenues disaggregated by geographic location (in millions):
 Fiscal Years Ended
 March 27,
2021
March 28,
2020
March 30,
2019
Versace revenue - the Americas$201 $186 $22 
Versace revenue - EMEA276 420 66 
Versace revenue - Asia241 237 49 
 Total Versace718 843 137 
Jimmy Choo revenue - the Americas102 107 96 
Jimmy Choo revenue - EMEA146 282 321 
Jimmy Choo revenue - Asia170 166 173 
 Total Jimmy Choo418 555 590 
Michael Kors revenue - the Americas1,869 2,822 3,064 
Michael Kors revenue - EMEA607 821 892 
Michael Kors revenue - Asia448 510 555 
 Total Michael Kors2,924 4,153 4,511 
Total revenue - the Americas2,172 3,115 3,182 
Total revenue - EMEA1,029 1,523 1,279 
Total revenue - Asia859 913 777 
Total revenue$4,060 $5,551 $5,238 
v3.21.1
Leases
12 Months Ended
Mar. 27, 2021
Leases [Abstract]  
Leases Leases
The following table presents the Company’s supplemental balance sheets information related to leases (in millions):
Balance Sheet LocationMarch 27,
2021
March 28,
2020
Assets
Operating leasesOperating lease right-of-use assets$1,504 $1,625 
Liabilities
Current:
Operating leasesShort-term portion of operating lease liabilities$447 $430 
Non-current:
Operating leasesLong-term portion of operating lease liabilities$1,657 $1,758 
The components of net lease costs for the fiscal year ended March 27, 2021 and March 28, 2020 were as follows (in millions):
Consolidated Statement of Operations and
Comprehensive (Loss) Income Location
March 27,
2021
March 28,
2020
Operating lease costSelling, general and administrative expenses$432 $449 
Variable lease cost (1)
Selling, general and administrative expenses69 155 
Short-term lease costSelling, general and administrative expenses15 18 
Sublease incomeSelling, general and administrative expenses(6)(6)
Total lease cost$510 $616 
(1)The Company elected to account for rent concessions negotiated in connection with COVID-19 as if it were contemplated as part of the existing contract and these concessions are recorded as variable lease expense. As of the fiscal year ended March 27, 2021, rent concessions due to COVID-19 were $52 million. There is an immaterial impact from these concessions for the fiscal year ended March 28, 2020.
The following table presents the Company’s supplemental cash flow information related to leases (in millions):
March 27,
2021
March 28,
2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases$488 $495 
Non-cash transactions:
Lease assets obtained in exchange for new lease liabilities348 428 
Rent concessions due to COVID-1952 — 
The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance sheets as of March 27, 2021 and March 28, 2020:
March 27, 2021March 28,
2020
Operating leases:
Weighted average remaining lease term (years)6.26.6
Weighted average discount rate3.1 %2.9 %
At March 27, 2021, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):
March 27, 2021
Fiscal 2022$502 
Fiscal 2023437 
Fiscal 2024370 
Fiscal 2025291 
Fiscal 2026221 
Thereafter493 
Total lease payments2,314 
Less: interest(210)
Total lease liabilities$2,104 
At March 27, 2021, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):
March 27, 2021
Fiscal 2022$
Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Thereafter
Total sublease income$29 
Additionally, the Company had approximately $23 million and $13 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of March 27, 2021 and March 28, 2020, respectively.
See Note 2 for additional information on the Company's accounting policies related to leases.
v3.21.1
Acquisitions
12 Months Ended
Mar. 27, 2021
Business Combinations [Abstract]  
Acquisitions Acquisitions
Fiscal 2020
Acquisition of Alberto Gozzi S.r.L.
On December 16, 2019, the Company entered into a definitive agreement to acquire Italian atelier and shoe manufacturer Alberto Gozzi S.r.L. The transaction was completed in the Company's fourth quarter of Fiscal 2020 and the assets and liabilities acquired approximated fair value. The acquired identifiable assets and liabilities net to a nominal amount, with $11 million recognized in goodwill allocated to the Jimmy Choo reportable segment.
Fiscal 2019
Acquisition of Versace
On December 31, 2018, the Company completed the acquisition of Versace for a total enterprise value of approximately €1.753 billion (or approximately $2.005 billion), giving effect to an investment made by the Versace family at acquisition of 2.4 million shares. The acquisition was funded through a combination of borrowings under the Company’s 2018 Term Loan Facility, drawings under the Company’s Revolving Credit Facility and cash on hand.
Versace’s results of operations have been included in our consolidated financial statements beginning on December 31, 2018. Versace contributed total revenue of $137 million and net loss of $12 million, after amortization of non-cash purchase accounting adjustments and transition and transaction costs, from the date of acquisition on December 31, 2018 through February 28, 2019 (reflecting a one-month reporting lag).
The Company recorded measurement period adjustments during Fiscal 2020. The measurement period adjustments are primarily related to conclusions reached on the ability to utilize certain deferred tax assets based on new facts and circumstances identified which existed at the acquisition date and if known, would have affected the measurement of the amounts recognized as of that date. The net measurement period adjustments increased goodwill by $26 million.
The following table summarizes the unaudited pro-forma consolidated results of operations for the fiscal year ended March 30, 2019 as if the acquisition had occurred on April 2, 2017, the beginning of Fiscal 2018 (in millions):
March 30, 2019
Pro-forma total revenue$5,983 
Pro-forma net income579 
Pro-forma net income per ordinary share attributable to Capri:
Basic
$3.82 
Diluted
$3.78 
The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company and Versace and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of Fiscal 2018 and are not indicative of the future operating results of the combined company. The financial information for Versace prior to the acquisition has been included in the pro-forma results of operations on a calendar-year basis and includes certain adjustments to Versace’s historical consolidated financial statements to align with U.S. GAAP and the Company’s accounting policies. The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the definite-lived intangible assets acquired, fair value adjustments relating to leases and property and equipment, and the related tax effects assuming that the business combination occurred on April 2, 2017. Purchase accounting amortization of the inventory step-up adjustment has been excluded from the above pro-forma amounts due to the short-term nature of this adjustment. The pro-forma consolidated financial statements also reflect the impact of debt repayment and borrowings made to finance the acquisition and exclude historical interest expenses related to Versace’s €90 million pre-existing debt. Transaction costs of $41 million for Fiscal 2019, which have been recorded within restructuring and other charges in the Company’s consolidated statements of operations and comprehensive (loss) income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature. The shares used to calculate the pro-forma net income per ordinary share attributable to Capri reflect the weighted average impact of a 2.4 million ordinary share investment made by the Versace family at acquisition date.
v3.21.1
Receivables, net
12 Months Ended
Mar. 27, 2021
Receivables [Abstract]  
Receivables, net Receivables, net
Receivables, net consist of (in millions):
March 27,
2021
March 28,
2020
Trade receivables (1)
$412 $432 
Receivables due from licensees20 14 
432 446 
Less: allowances(59)(138)
$373 $308 

(1)As of March 27, 2021 and March 28, 2020, $81 million and $80 million, respectively, of trade receivables were insured.
Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and credit losses. Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on wholesale customers’ sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in revenues.
The Company’s allowance for credit losses is determined through analysis of periodic aging of receivables and assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered. Allowance for credit losses was $25 million and $39 million as of March 27, 2021 and March 28, 2020, respectively, including the impact related to COVID-19. The Company had credit loss of $(3) million, $29 million and $4 million, respectively, for Fiscal 2021, Fiscal 2020 and Fiscal 2019.
v3.21.1
Concentration of Credit Risk, Major Customers and Suppliers
12 Months Ended
Mar. 27, 2021
Risks and Uncertainties [Abstract]  
Concentration of Credit Risk, Major Customers and Suppliers Concentration of Credit Risk, Major Customers and Suppliers
Financial instruments that subject the Company to concentration of credit risk are cash and cash equivalents and receivables. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. The Company mitigates its risk by depositing cash and cash equivalents in major financial institutions. The Company also mitigates its credit risk by obtaining insurance coverage for a portion of its receivables (see Note 6). No individual customer accounted for 10% or more of the Company’s total revenues during Fiscal 2021, Fiscal 2020 or Fiscal 2019.
The Company contracts for the purchase of finished goods principally with independent third-party contractors, whereby the contractor is generally responsible for all manufacturing processes. Although the Company does not have any long-term agreements with any of its manufacturing contractors, the Company believes it has mutually satisfactory relationships with them. The Company allocates product manufacturing among agents and contractors based on their capabilities, the availability of production capacity, quality, pricing and delivery. The inability of certain contractors to provide needed services on a timely basis could adversely affect the Company’s operations and financial condition. For Fiscal 2021, Fiscal 2020 and Fiscal 2019, one contractor accounted for approximately 18%, 20% and 21%, respectively, of the Company’s total finished goods purchases, based on dollar volume.
The Company also has relationships with various agents who source finished goods with numerous contractors on behalf of its Michael Kors brand. For Fiscal 2021, Fiscal 2020 and Fiscal 2019, one agent sourced approximately 26%, 26% and 24%, respectively, of Michael Kors finished goods, based on unit volume.
v3.21.1
Property and Equipment, net
12 Months Ended
Mar. 27, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment, net Property and Equipment, net
Property and equipment, net, consists of (in millions):
March 27,
2021
March 28,
2020
Leasehold improvements$737 $704 
Computer equipment and software359 329 
Furniture and fixtures350 329 
Equipment139 136 
In-store shops (1)
53 236 
Building 51 49 
Land20 19 
1,709 1,802 
Less: accumulated depreciation and amortization (1)
(1,271)(1,310)
438 492 
Construction-in-progress47 69 
$485 $561 

(1)The Company wrote off $179 million of fully depreciated assets which were no longer in service from in-store shops and related accumulated depreciation during the fiscal year ended March 27, 2021.
Depreciation and amortization of property and equipment for the fiscal years ended March 27, 2021, March 28, 2020, and March 30, 2019 totaled $165 million, $200 million and $188 million, respectively. During Fiscal 2021, Fiscal 2020 and Fiscal 2019, the Company recorded property and equipment impairment charges of $23 million, $77 million and $19 million, respectively, primarily related to the Company's retail store locations. See Note 14 for additional information.
v3.21.1
Intangible Assets and Goodwill
12 Months Ended
Mar. 27, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Goodwill Intangible Assets and Goodwill
The following table details the carrying values of the Company’s intangible assets other than goodwill (in millions):
 March 27, 2021March 28, 2020
 Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Definite-lived intangible assets:
Reacquired rights $400 $77 $323 $400 $61 $339 
Trademarks23 21 23 20 
Customer relationships437 86 351 404 51 353 
860 184 676 827 132 695 
Indefinite-lived intangible assets:
Jimmy Choo brand (1)
587 249 338 547 180 367 
Versace brand (2)
978 — 978 924 — 924 
1,565 249 1,316 1,471 180 1,291 
Total intangible assets, excluding goodwill$2,425 $433 $1,992 $2,298 $312 $1,986 

(1)The year-over-year change in carrying value reflects an impairment charge of $69 million and foreign currency translation of $40 million for the fiscal year ended March 27, 2021. The Company recorded an impairment charge of $180 million for the fiscal year ended March 28, 2020.
(2)The year-over-year change in value relates to foreign currency translation.
Reacquired rights relate to the Company’s reacquisition of the rights to use the Michael Kors trademarks and to import, sell, advertise and promote certain of its products in the previously licensed territories in the Greater China region and are being amortized through March 31, 2041, the expiration date of the related license agreement. The trademarks relate to the Michael Kors brand name and are amortized over twenty years. Customer relationships are generally amortized over five to eighteen years. Amortization expense for the Company’s definite-lived intangibles was $47 million, $49 million and $37 million, respectively, for each of the fiscal years ended March 27, 2021, March 28, 2020 and March 30, 2019.
Indefinite-lived intangible assets other than goodwill included the Versace and Jimmy Choo brands, which were recorded in connection with the acquisitions of Versace and Jimmy Choo, and have an indefinite life due to being essential to the Company’s ability to operate the Versace and Jimmy Choo businesses for the foreseeable future.
Estimated amortization expense for each of the next five years is as follows (in millions):
Fiscal 2022$47 
Fiscal 202347 
Fiscal 202447 
Fiscal 202547 
Fiscal 202647 
Fiscal 2027 and thereafter441 
$676 
The future amortization expense above reflects weighted-average estimated remaining useful lives of 20 years for reacquired rights, 2 years for trademarks and 12 years for customer relationships.
The following table details the changes in goodwill for each of the Company’s reportable segments (in millions):
VersaceJimmy ChooMichael Kors Total
Balance at March 30, 2019861 678 120 $1,659 
Acquisition— 11 — 11 
Measurement period adjustment (1)
26 — — 26 
Impairment charges (2)
— (171)— (171)
Foreign currency translation
(6)(31)— (37)
Balance at March 28, 2020881 487 120 1,488 
Impairment charges (2)
— (94)— (94)
Foreign currency translation
52 52 — 104 
Balance at March 27, 2021$933 $445 $120 $1,498 

(1)See Note 5 for additional information.
(2)The Company recorded impairment charges during Fiscal 2021 of $94 million related to the Jimmy Choo wholesale and licensing reporting units, and $171 million during Fiscal 2020 related to the Jimmy Choo retail and licensing reporting units.
The Company’s goodwill and the Versace and Jimmy Choo brands are not subject to amortization but are evaluated for impairment annually in the last quarter of each fiscal year, or whenever impairment indicators exist. During the fourth quarter of Fiscal 2021, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for its three segments. The Company performed its goodwill impairment assessment for its Michael Kors segment using a qualitative assessment. Based on the results of the Company’s qualitative impairment assessment, the Company concluded that it is more likely than not that the fair value of the Michael Kors’ reporting units exceeded their carrying value and, therefore, were not impaired.
The Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for both the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair value of each brands' reporting units. The Company also elected to perform an impairment analysis for both the Versace and Jimmy Choo brand indefinite-lived intangible assets using an income approach to estimate the fair values. Based on the results of these assessments, the Company determined there was no impairment loss for the Jimmy Choo Retail reporting unit. The Company also concluded that the fair values of the Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.
However, the Company concluded that the fair value of the Jimmy Choo Wholesale and Jimmy Choo Licensing reporting units, along with the Jimmy Choo brand indefinite-lived intangible assets, did not exceed their related carrying amounts. These impairment charges were primarily related to higher discount rates in the current year driven by a change in market factors as well as a shift in expected revenue and earnings mix to the retail segment.
Accordingly, the Company recorded impairment charges of $94 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $69 million related to the Jimmy Choo brand intangible assets during Fiscal 2021. The Company recorded impairment charges of $171 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $180 million related to the Jimmy Choo brand intangible assets during Fiscal 2020. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive (loss) income for the fiscal years ended March 27, 2021 and March 28, 2020. The Company did not record any such impairment charges in Fiscal 2019. See Note 14 for additional information.
v3.21.1
Current Assets and Current Liabilities
12 Months Ended
Mar. 27, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Current Assets and Current Liabilities Current Assets and Current Liabilities
Prepaid expenses and other current assets consist of the following (in millions):
March 27,
2021
March 28,
2020
Prepaid taxes$133 $116 
Other accounts receivables13 10 
Interest receivable related to net investment hedges12 
Prepaid contracts11 17 
Other36 23 
$205 $167 
Accrued expenses and other current liabilities consist of the following (in millions):
March 27,
2021
March 28,
2020
Other taxes payable$46 $38 
Return liabilities46 37 
Accrued rent (1)
20 10 
Charitable donations (2)
20 — 
Accrued capital expenditures17 31 
Professional services13 10 
Accrued litigation12 10 
Gift and retail store credits12 11 
Accrued advertising and marketing11 
Accrued interest10 
Restructuring liability
Accrued purchases and samples
Other73 65 
$297 $241 
(1)The accrued rent balance relates to variable lease payments.
(2)Relates to a $20 million unconditional pledge to The Capri Holdings Foundation for the Advancement of Diversity in Fashion.
v3.21.1
Restructuring and Other Charges
12 Months Ended
Mar. 27, 2021
Restructuring and Related Activities [Abstract]  
Restructuring and Other Charges Restructuring and Other Charges
Capri Retail Store Optimization Program
As previously announced, the Company intends to close approximately 170 of its retail stores over two fiscal years, which began during Fiscal 2021 and will continue into Fiscal 2022, in connection with its Capri Retail Store Optimization Program in order to improve the profitability of its retail store fleet. In addition, the Company expects to incur approximately $75 million of one-time costs related to this program, including lease termination and other store closure costs, the majority of which are expected to result in future cash expenditures.
During Fiscal 2021, the Company closed 101 of its retail stores which have been incorporated into the Capri Retail Store Optimization Program. Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program during Fiscal 2021 was $5 million. The below table presents a roll forward of the Company's restructuring liability related to its Capri Retail Store Optimization Program (in millions):
Severance and benefit costsLease-related and other costsTotal
Balance at March 28, 2020$— $— $— 
Additions charged to expense (1)
11 13 
Payments(2)(11)(13)
Other— 
Balance at March 27, 2021$— $$

(1)Excludes a net credit of $8 million related to lease termination gains of previously impaired operating lease right-of-use assets partially offset by additional impairments for the stores closing under the Company’s Capri Retail Store Optimization Program during Fiscal 2021.
Michael Kors Retail Fleet Optimization Plan
During Fiscal 2020, the Company recorded restructuring charges of $5 million under the Michael Kors Retail Fleet Optimization Plan, which was completed during the fourth quarter of Fiscal 2020.

Other Restructuring Charges
In addition to the restructuring charges related to the Capri Retail Store Optimization Plan, the Company incurred charges of $8 million primarily relating to closures of corporate locations during Fiscal 2021.
The Company incurred $3 million of restructuring charges related to the Michael Kors Retail Fleet Optimization Plan during Fiscal 2020, primarily consisting of lease-related costs.
Other Costs
During Fiscal 2021, the Company recorded costs of $19 million primarily related to equity awards associated with the acquisition of Versace.
During Fiscal 2020, the Company recorded costs of $34 million, which included $24 million in connection with the Versace acquisition, $9 million in connection with the acquisition of Jimmy Choo and $1 million in connection with the acquisition of Gozzi.
v3.21.1
Debt Obligations
12 Months Ended
Mar. 27, 2021
Debt Disclosure [Abstract]  
Debt Obligations Debt Obligations
The following table presents the Company’s debt obligations (in millions):
March 27,
2021
March 28,
2020
Term Loan$870 $1,015 
Senior Notes due 2024
450 450 
Revolving Credit Facility— 720 
Other30 
Total debt 1,350 2,188 
Less: Unamortized debt issuance costs
Less: Unamortized discount on long-term debt
Total carrying value of debt1,342 2,179 
Less: Short-term debt123 167 
Total long-term debt$1,219 $2,012 

Senior Secured Revolving Credit Facility
On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”) to its third amended and restated credit facility, dated as of November 15, 2018 (the “2018 Credit Facility”), with, among others, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”). Pursuant to the Second Amendment, the obligations under the 2018 Credit Facility are secured by liens on substantially all of the assets of the Company and its U.S. subsidiaries that are borrowers and guarantors, subject to certain exceptions, and substantially all of the registered intellectual property of the Company and its subsidiaries. This requirement for collateral will fall away if the Company achieves an investment grade ratings requirement for two consecutive full fiscal quarters. The Amendment adds a restriction on the disposition of assets and a requirement to prepay the term loans with certain net cash proceeds of non-ordinary course asset sales, subject to certain exceptions and a reinvestment option with respect to up to $100 million of net cash proceeds in the aggregate.
Pursuant to the Second Amendment, the financial covenant in the Company’s 2018 Credit Facility requiring it to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 has been waived through the fiscal quarter ending June 26, 2021. The Company terminated the waiver period effective May 26, 2021. Effective as of that date, the applicable ratio will be calculated net of the Company’s unrestricted cash and cash equivalents in excess of $100 million and shall exclude up to $150 million of supply chain financings, and the maximum permitted net leverage ratio will be 4.00 to 1.0. In addition, until March 31, 2021, the material adverse change representation required to be made in connection with revolving borrowings and the issuance or amendment of letters of credit will be modified to disregard certain COVID-19 pandemic-related impacts to the business, results of operations or financial condition of the Company and its subsidiaries, taken as a whole. The Second Amendment also requires the Company, during the period from June 25, 2020 until it delivers its financial statements with respect to the fiscal quarter ending June 26, 2021, to maintain at all times unrestricted cash and cash equivalents plus the aggregate undrawn amounts under the revolving facilities under the 2018 Credit Facility of not less than $300 million, increasing to $400 million on October 1, 2020 and $500 million on December 1, 2020.
The 2018 Credit Facility and the Indenture governing the Company's senior notes contain certain restrictive covenants that impose operating and financial restrictions on the Company, and the Second Amendment imposes incremental restrictions on certain of these covenants during the covenant relief period provided under the 2018 Credit Facility, including restrictions on its ability to incur additional indebtedness and guarantee indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, make loans and investments, including acquisitions, sell assets, incur liens, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of its assets.
The 2018 Credit Facility provides for a $1 billion revolving credit facility (the "Revolving Credit Facility"), which may be denominated in U.S. dollars and other currencies, including Euros, Canadian Dollars, Pounds Sterling, Japanese Yen and Swiss Francs. The Revolving Credit Facility also provides sub-facilities for the issuance of letters of credit of up to $75 million and swing loans of up to $75 million. The 2018 Credit Facility also provides for a $1.6 billion term loan facility (the "2018 Term Loan Facility"). The 2018 Term Loan Facility is divided into two tranches, with the second tranche maturing in December 2023, which requires a quarterly payment of $24 million. As of March 27, 2021, the Company has fully paid off Tranche 1 of the 2018 Term Loan Facility.
In addition, the Second Amendment adds a new $230 million revolving line of credit that matures on June 24, 2021 (the “364 Day Facility”). The terms of the 364 Day Facility are substantially similar to the terms of the existing revolving facility under the 2018 Credit Facility except that (i) no letters of credit or swingline loans are provided and (ii) for loans subject to Adjusted LIBOR, the applicable margin is 225 basis points per annum, for loans subject to the base rate the applicable margin is 125 basis points per annum and the commitment fee is 35 basis points per annum. In addition, while the 364 Day Facility is outstanding, (i) if the Company incurs any incremental indebtedness under the 2018 Credit Facility or certain permitted indebtedness in lieu of such incremental indebtedness, the 364 Day Facility will be reduced on a dollar for dollar basis and the Company will be required to make corresponding prepayments and (ii) the Company will be required to prepay amounts outstanding under the 364 Day Facility on a weekly basis to the extent that cash and cash equivalents of the Company and its subsidiaries exceed $200 million.
The Second Amendment also permits certain working capital facilities between the Company or any of its subsidiaries with a lender or an affiliate of a lender under the 2018 Credit Facility to be guaranteed under the 2018 Credit Facility guarantees and certain supply chain financings with, and up to $50 million outstanding principal amount of bilateral letters of credit and bilateral bank guarantees issued by a lender or an affiliate of a lender to be guaranteed and secured under the 2018 Credit Facility guarantees and collateral documents.
Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at the following rates:
for any loans (except loans denominated in Canadian Dollars), the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt rating;
for loans denominated in U.S. Dollars, an alternate base rate, which is the greatest of: (a) the prime rate publicly announced from time to time by JPMorgan Chase, (b) the greater of the federal funds effective rate and the Federal Reserve Bank of New York overnight bank funding rate and zero, plus 50 basis points, and (c) the greater of the one-month London Interbank Offered Rate adjusted for statutory reserve requirements for Eurocurrency liabilities (“Adjusted LIBOR”) and zero, plus 100 basis points, in each case, plus an applicable margin based on the Company’s public debt ratings;
for loans denominated in Canadian Dollars, the Canadian prime rate, which is the greater of the PRIMCAN Index rate and the rate applicable to one-month Canadian Dollar banker’s acceptances quoted on Reuters (“CDOR”), plus 100 basis points, plus an applicable margin based on the Company’s public debt ratings; or
for loans denominated in Canadian Dollars, the average CDOR rate for the applicable interest period, plus 10 basis points per annum, plus an applicable margin based on the Company’s public debt ratings.
Borrowings under the 2018 Term Loan Facility bear interest, at the Company’s option, at (a) the alternate base rate plus an applicable margin based on the Company’s public debt ratings; or (b) the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt ratings.
The Revolving Credit Facility also provides for an annual administration fee and a commitment fee equal to 0.10% to 0.25% per annum, based on the Company’s public debt ratings, applied to the average daily unused amount of the Revolving Credit Facility. The 2018 Term Loan Facility provides for a commitment fee equal to 0.10% to 0.25% per annum, based on the Company’s public debt ratings, applied to the undrawn amount of the 2018 Term Loan Facility, from January 6, 2019 until the term loans are fully drawn or the commitments under the 2018 Term Loan Facility terminate or expire. Loans under the 2018 Credit Facility may be repaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than the customary breakage costs with respect to loans bearing interest based on Adjusted LIBOR or the CDOR rate.
As of the last day of Fiscal 2021, the 2018 Credit Facility requirement of the Company to maintain a leverage ratio as of the end of each fiscal quarter of no greater than 3.75 to 1 has been waived through the fiscal quarter ending June 26, 2021. Such leverage ratio is calculated based on the ratio of consolidated total indebtedness plus the capitalized amount of all operating lease liabilities presented on our consolidated balance sheets to Consolidated EBITDAR (as defined below) for the last four consecutive fiscal quarters. Consolidated EBITDAR is defined as consolidated net income plus income tax expense, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash charges, subject to certain additions and deductions. The 2018 Credit Facility also includes covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash dividends that are customary for financings of this type. See Note 22 for additional information. As of March 27, 2021 and the date these financial statements were issued, the Company was in compliance with
all covenants related to this agreement, which was calculated based on the unrestricted cash and cash equivalents plus the aggregate undrawn amounts of no less than $500 million under the 2018 Credit Facility.
The 2018 Credit Facility contains events of default customary for financings of this type, including, but not limited to, payment of defaults, material inaccuracy of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy or insolvency, certain events under The Employee Retirement Income Security Act, material judgments, actual or asserted failure of any guaranty supporting the 2018 Credit Facility to be in full force and effect, and changes of control. If such an event of default occurs, the lenders under the 2018 Credit Facility would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the 2018 Credit Facility, subject to “certain funds” limitations in connection with the transaction governing the 2018 Term Loan Facility.
As of March 27, 2021, the Company had no borrowings outstanding under the Revolving Credit Facility as a result of repaying the remaining borrowings. As of March 28, 2020, the Company had $681 million borrowings outstanding under the Revolving Credit Facility, which were recorded within long-term debt in its consolidated balance sheets. In addition, stand-by letters of credit of $27 million and $18 million were outstanding as of March 27, 2021 and March 28, 2020, respectively. At March 27, 2021, the amount available for future borrowings under the Revolving Credit Facility and the 364 Day facility were $973 million and $230 million, respectively.
As of March 27, 2021, the carrying values of borrowings outstanding under the 2018 Term Loan Facility were $865 million, net of debt issuance costs of $5 million, $97 million of which was recorded within short-term debt while $768 million was recorded within long-term debt in the Company's consolidated balance sheets. As of March 28, 2020, the carrying values of borrowings outstanding under the 2018 Term Loan Facility were $1.010 billion, net of debt issuance costs of $5 million, $128 million of which was recorded within short-term debt while $882 million was recorded within long-term debt in the Company's consolidated balance sheets.
Senior Notes
On October 20, 2017, Michael Kors (USA), Inc. (the “Issuer”), the Company’s wholly owned subsidiary, completed its offering of $450 million aggregate principal amount of 4.000% senior notes due 2024 (the “Senior Notes”) at an issue price of 99.508% of aggregate principal amount, pursuant to an exemption from registration under the Securities Act of 1933, as amended. The Senior Notes were issued under an indenture dated October 20, 2017, among the Issuer, the Company, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (the “Indenture”). The Senior Notes were issued to finance a portion of the Company’s acquisition of Jimmy Choo and certain related refinancing transactions.
As of March 27, 2021, the Senior Notes bear interest at a rate of 4.500% per year, subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency therefore) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes. Interest on the Senior Notes is payable semi-annually on May 1 and November 1 of each year, beginning on May 1, 2018.
The Senior Notes are unsecured and are guaranteed by the Company and its existing and future subsidiaries that guarantee or are borrowers under the 2018 Credit Facility (subject to certain exceptions, including subsidiaries organized in China).
The Senior Notes may be redeemed at the Company’s option at any time in whole or in part at a price equal to 100% of the principal amount, plus accrued and unpaid interest, plus a “make-whole” amount calculated at the applicable Treasury Rate plus 30 basis points.
The Senior Notes rank equally in right of payment with all of the Issuer’s and guarantors’ existing and future senior unsecured indebtedness, senior in right of payment to any future subordinated indebtedness, effectively subordinated in right of payment to any of the Company’s subsidiaries’ obligations (including secured and unsecured obligations) and any of the Company’s secured obligations, to the extent of the assets securing such obligations.
The Indenture contains covenants, including those that limit the Company’s ability to create certain liens and enter into certain sale and leaseback transactions. In the event of a “Change of Control Triggering Event,” as defined in the Indenture, the Issuer will be required to make an offer to repurchase the Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the Senior Notes being repurchased plus any unpaid interest. These covenants are subject to important limitations and exceptions, as per the Indenture.
As of March 27, 2021 and March 28, 2020, the carrying value of the Senior Notes was $447 million and $446 million, respectively, net of issuance costs and unamortized discount, which were recorded within long-term debt in the Company's consolidated balance sheets.
Supplier Financing Program
During the third quarter of Fiscal 2021, the Company began offering a supplier financing program to certain suppliers as the Company continues to identify opportunities to improve liquidity. This program enables suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide. The Company’s obligations, including the amount due and scheduled payment dates, are not impacted by a suppliers’ decision to participate in this program. The Company does not reimburse suppliers for any costs they incur to participate in the program and their participation is voluntary. The amount outstanding under this program as of March 27, 2021 was $17 million and is presented as short-term debt in the Company’s consolidated balance sheets.
Japan Credit Facility
In Fiscal 2021, the Company’s subsidiary in Japan renewed a short term credit facility (“Japan Credit Facility”) with Mitsubishi UFJ Financial Group (“MUFJ”), which may be used to fund general working capital needs of Michael Kors Japan K.K., subject to the bank’s discretion. The Japan Credit Facility is in effect through November 30, 2021. The Japan Credit Facility provides Michael Kors Japan K.K. with a revolving credit line of up to ¥1.0 billion (approximately $9 million). The Japan Credit Facility bears interest at a rate posted by the Bank plus 0.300% two business days prior to the date of borrowing or the date of interest renewal. As of March 27, 2021 the Company had $9 million borrowings outstanding under the Japan Credit Facility and no borrowings outstanding as of March 28, 2020, which were recorded within short-term debt in the Company's consolidated balance sheets.
Hong Kong Credit Facility
In May 2020, the Company’s Hong Kong subsidiary, MKHKL, renewed its uncommitted credit facility (“HK Credit Facility”) with HSBC, which may be used to fund general working capital needs of MKHKL through September 30, 2021 subject to the bank’s discretion. The HK Credit Facility provides MKHKL with a revolving line of credit of up to 100 million Hong Kong Dollars (approximately $13 million), and may be used to support bank guarantees. Borrowings under the HK Credit Facility must be made in increments of at least 5 million Hong Kong Dollars and bear interest at the Hong Kong Interbank Offered Rate (“HIBOR”) plus 150 basis points. As of March 27, 2021 and March 28, 2020, there were no borrowings outstanding under the HK Credit Facility. As of March 27, 2021, bank guarantees supported by this facility were 3 million Hong Kong Dollars (less than $1 million). At March 27, 2021, the amount available for future borrowings under the HK Credit Facility was 97 million Hong Kong Dollars (approximately $13 million).

China Credit Facility
In January 2019, the Company’s subsidiary in China, MKTSCL, entered into a short-term credit facility (“China Credit Facility”) with HSBC, which may be used to fund general working capital needs, not to exceed 12 months. The China Credit Facility is in effect through December 31, 2021. The China Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 70 million (approximately $11 million), an overdraft facility with a credit line of RMB 10 million (approximately $1 million) and a non-financial bank guarantee facility of RMB 20 million (approximately $3 million) or its equivalent in another currency, at lender’s discretion. Borrowings under the China Credit Facility bear interest at 105% of the applicable People’s Bank of China’s Benchmark lending rate at the time of borrowing. As of March 27, 2021 and March 28, 2020, the Company had no borrowings outstanding under the China Credit Facility.
Versace Credit Facilities
In June 2019, the Company’s subsidiary, Versace, entered into two uncommitted short-term credit facilities, one with Unicredit and the other with Intesa (“Versace Credit Facilities”), which may be used for general working capital needs of Versace. The Versace Credit Facilities provide Versace with a swing line of credit of up to €32 million (approximately $38 million), with interest set by the bank on the date of borrowing. As of March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility. As of March 28, 2020, there were borrowings outstanding of €25 million (approximately $28 million), which were recorded within short-term debt in the Company's consolidated balance sheets.
In November 2018, Versace entered into an overdraft facility ("Versace Overdraft Facility"), which may be used for general working capital needs of Versace. The overdraft facility provides Versace with a line of credit of up to €5 million (approximately $6 million). As of March 27, 2021 and March 28, 2020, there were no borrowings outstanding under the Versace Overdraft Facility.
In January 2018, Versace entered into an uncommitted short-term credit facility (“Versace Credit Facility”), which may be used for general working capital needs of Versace. The Versace Credit Facility provides Versace with a swing line of credit of up to €20 million (approximately $24 million), with interest set by the bank on the date of borrowing. As of March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility. As of March 28, 2020, there were borrowings outstanding of €10 million (approximately $11 million), which were recorded within short-term debt in the Company's consolidated balance sheets.
v3.21.1
Commitments and Contingencies
12 Months Ended
Mar. 27, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Commitments
The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating $33 million at March 27, 2021, including $27 million in letters of credit issued under the Revolving Credit Facility.
Other Commitments
As of March 27, 2021, the Company also has other contractual commitments aggregating $2.108 billion, which consist of inventory purchase commitments of $688 million, debt obligations of $1.350 billion and other contractual obligations of $70 million, which primarily relate to the Company’s marketing and advertising obligations, information technology agreements and supply agreements.
Long-term Employment Contract
The Company has an employment agreement with the Chief Creative Officer of the Michael Kors brand that provides for continuous employment through the date of the officer’s death or permanent disability at an annual salary of $1 million. In addition to salary, the agreement provides for an annual bonus and other employee related benefits. In response to the continued global health and economic impact of the COVID-19 pandemic, the Chief Creative Officer of the Michael Kors brand voluntarily elected to forgo his salary for Fiscal 2021.
Contingencies
In the ordinary course of business, the Company is party to various legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, the Company does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position.
v3.21.1
Fair Value Measurements
12 Months Ended
Mar. 27, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Financial assets and liabilities are measured at fair value using the three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date.
Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
At March 27, 2021 and March 28, 2020, the fair values of the Company’s forward foreign currency exchange contracts, interest rate swaps and net investment hedges were determined using broker quotations, which were calculations derived from observable market information: the applicable currency rates at the balance sheet date and those forward rates particular to the contract at inception. The Company makes no adjustments to these broker obtained quotes or prices, but assesses the credit risk of the counterparty and would adjust the provided valuations for counterparty credit risk when appropriate. The fair values of the forward contracts are included in prepaid expenses and other current assets, and in accrued expenses and other current liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities to the Company. The fair values of net investment hedges and interest rate swaps are included in other assets, and in other long-term liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities of the Company. See Note 15 for detail.
All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in millions):
 
Fair value at March 27, 2021, using:
Fair value at March 28, 2020, using:
Quoted prices
in active
markets for
identical
assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Quoted prices
in active
markets for
identical
assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Derivative assets:
Forward foreign currency exchange contracts$— $$— $— $$— 
Net investment hedges— — — — 
Total derivative assets$— $$— $— $$— 
Derivative liabilities:
Forward foreign currency exchange contracts$— $$— $— $— $— 
Net investment hedges— 263 — — — — 
Designated interest rate swaps— — — — — 
Total derivative liabilities$— $265 $— $— $— $— 
The Company’s long-term debt obligations are recorded in its consolidated balance sheets at carrying values, which may differ from the related fair values. The fair value of the Company’s long-term debt is estimated using external pricing data, including any available quoted market prices and based on other debt instruments with similar characteristics. Borrowings under revolving credit agreements, if outstanding, are recorded at carrying value, which approximates fair value due to the frequent nature of such borrowings and repayments. See Note 12 for detailed information related to carrying values of the Company’s outstanding debt. The following table summarizes the carrying values and estimated fair values of the Company’s short- and long-term debt, based on Level 2 measurements (in millions):
March 27, 2021March 28, 2020
Carrying ValueEstimated
 Fair Value
Carrying ValueEstimated
 Fair Value
Senior Notes due 2024$447 $470 $446 $443 
Term Loan$865 $866 $1,010 $957 
Revolving Credit Facilities$— $— $720 $720 
The Company’s cash and cash equivalents, accounts receivable and accounts payable, are recorded at carrying value, which approximates fair value.
Non-Financial Assets and Liabilities

The Company’s non-financial assets include goodwill, intangible assets, operating lease right-of-use assets and property and equipment. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. The Company’s goodwill and its indefinite-lived intangible assets (Versace and Jimmy Choo brands) are assessed for impairment at least annually, while its other long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The fair values of these assets were determined based on Level 3 measurements using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.
The following table details the carrying values and fair values of the Company’s assets that have been impaired (in millions):
Carrying Value Prior to ImpairmentFair Value
Impairment Charge (1)
Fiscal 2021:
Operating Lease Right-of-Use Assets
$326 $191 $135 
Goodwill319 225 94 
Brands407 338 69 
Property and Equipment
30 23 
Total$1,082 $761 $321 
Fiscal 2020:
Operating Lease Right-of-Use Assets$717 $437 $280 
Brands547 367 180 
Goodwill474 303 171 
Property and Equipment105 28 77