| LEASES [Text Block] |
LEASESThe Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. The Company's leases generally have initial terms ranging from 1 year to 10 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to early terminate the lease. As of September 26, 2020, the Company's finance leases were not material to the consolidated balance sheets, consolidated statements of operations, or statements of cash flows. As a result of the COVID-19 pandemic, during the second quarter of fiscal 2020 the Company suspended rent payments under the leases for our temporarily closed stores in North America. The Company has continued to recognize expense and has established an accrual for the fixed rent payments that were not made. As of September 26, 2020, the Company accrued $31.8 million in fixed rent payments. The accrued rent is included within Accounts payable on the Company's consolidated balance sheets. As of the end of the fiscal quarter, the Company resumed making the required rent payments under these leases. In the third quarter and for the three quarters of fiscal 2020, the Company recorded operating lease asset impairment charges totaling $1.4 million and $6.1 million, respectively, related to underperforming stores primarily as a result of decreased net revenues and cash flow projections resulting from the COVID-19 disruption and other facility and office closures. See Note 11, Fair Value Measurements, for further details on the fair value calculations for operating lease assets for the retail stores. The following components of lease expense are included in Selling, general and administrative expenses on the Company's consolidated statements of operations for the third quarter and first three quarters of fiscal 2020 and 2019: | | | | | | | | | | | | | | | | | | | | Fiscal quarter ended | | Three fiscal quarters ended | (dollars in thousands) | | | | | | | | | Operating lease cost | | $ | 44,230 |
| | $ | 45,584 |
| | $ | 136,180 |
| | $ | 133,491 |
| Variable lease cost (*) | | 19,635 |
| | 15,492 |
| | 55,139 |
| | 46,692 |
| Net lease cost | | $ | 63,865 |
| | $ | 61,076 |
| | $ | 191,319 |
| | $ | 180,183 |
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| | (*) | Includes operating lease asset impairment charges, and short-term leases which are immaterial. |
Supplemental balance sheet information related to leases was as follows: | | | | | | | | Fiscal quarter ended | | | | | | Weighted average remaining operating lease term (years) | | 5.6 | | 6.1 | Weighted average discount rate for operating leases | | 3.71% | | 4.39% |
Cash paid for amounts included in the measurement of operating lease liabilities in the third quarter and first three quarters of fiscal 2020 was $41.6 million and $139.4 million, respectively. The total cash paid reflects the contractual amounts due to be paid in cash, which includes the suspended rent payments under the leases for our temporarily closed stores. For the three fiscal quarters ended September 26, 2020, the Company deferred cash payments of $31.8 million, which are included in the statement of cash flows as part of the change in Accounts payable and other liabilities. Cash paid for amounts included in the measurement of operating lease liabilities in the third quarter and three quarters of fiscal 2019 was $48.5 million and $143.7 million, respectively. Non-cash transactions to recognize operating assets and liabilities for the third quarter and first three quarters of fiscal 2020 were $7.3 million and $52.5 million, respectively. Non-cash transactions to recognize operating assets and liabilities for the third quarter and first three quarters of fiscal 2019 were $41.6 million and $96.0 million, respectively. | | | | | (dollars in thousands) | Operating leases | Remainder of 2020 | $ | 48,575 |
| 2021 | 194,335 |
| 2022 | 158,594 |
| 2023 | 130,414 |
| 2024 | 105,059 |
| 2025 | 76,501 |
| After 2025 | 128,220 |
| Total lease payments | $ | 841,698 |
| Less: Interest | (82,235 | ) | Present value of lease liabilities(*) | $ | 759,463 |
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| | (*) | As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We used the incremental borrowing rate on December 30, 2018, for operating leases that commenced prior to that date. |
As of September 26, 2020, the minimum rental commitments for additional operating lease contracts that have not yet commenced, primarily for retail stores, are $11.0 million. These operating leases will commence between fiscal year 2021 and fiscal year 2023 with lease terms of 6 years to 11 years.
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