Item 2.05. Costs Associated with Exit or Disposal Activities.
On September 6, 2019, Camping World Holdings, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Prior Report”) in which it disclosed a planned strategic shift. The Company is filing this Current Report on Form 8-K/A to amend the Prior Report to update its disclosure regarding planned restructuring actions.
As previously disclosed, on September 3, 2019, the Board of Directors (the “Board”) of the Company approved a plan to strategically shift its business away from locations where the Company does not have the ability or where it is not feasible to sell and/or service recreational vehicles (the “2019 Strategic Shift”). In connection with the 2019 Strategic Shift and through November 4, 2019, the Company has closed 8 locations that do not sell and/or service recreational vehicles but sell an assortment of outdoor lifestyle products (“Outdoor Lifestyle Locations”), and expects to close an additional 23 Outdoor Lifestyle Locations and two specialty retail locations operated by TheHouse.com. The Company was able to, or is in the process of, acquiring and/or obtaining the developmental consents, approvals and permits necessary for the sale and/or service of RVs at six of our Outdoor Lifestyle Locations. The Company now expects the majority of the store closures and/or divestitures related to the 2019 Strategic Shift to be completed by January 31, 2020.
The Company has evaluated the impact on the Company’s supporting infrastructure and operations and, as of November 4, 2019, the Company was able to determine an estimate of the costs associated with the 2019 Strategic Shift. The Company expects to incur costs relating to one-time employee termination benefits of $1.0 million, contract termination costs of between $10.0 million and $15.0 million, incremental inventory reserve charges of $27.3 million, and other associated costs of between $4.0 million and $6.0 million, resulting in total estimated costs of approximately $42.3 million to $49.3 million . The Company expects that approximately $15.0 million to $22.0 million of these costs will result in future cash expenditures.
Item 2.06. Material Impairments.
The text of Item 2.05 of this Current Report on Form 8-K/A, which describes the Company’s planned strategic shift and related store closures, is hereby incorporated by reference into this Item 2.06.
During the three months ended September 30, 2019, the Company determined that 38 locations had long-lived assets that were impaired. Of these 38 locations with long-lived assets that were impaired, two locations were unrelated to the 2019 Strategic Shift, 26 locations were Outdoor Lifestyle Locations that were operating at September 30, 2019, seven locations were Outdoor Lifestyle Locations that were previously closed or had not opened as of September 30, 2019, and three locations were specialty retail locations operated by TheHouse.com. The calculated long-lived asset impairment charge was allocated to each of the categories of long-lived assets at each location pro rata based on the long-lived assets’ carrying values, except that individual assets cannot be impaired below their individual fair values when that fair value can be determined without undue cost and effort. For most of these locations, the operating lease right-of-use assets and furniture and fixtures were written down to their individual fair values and the remaining impairment charge was allocated to the remaining long-lived assets up to the fair value estimated on these assets based on liquidation value estimates.
As of November 4, 2019, the Company was able to determine the impairment charges associated with the foregoing impairments. During the three months ended September 30, 2019, the Company incurred long-lived asset impairment charges of $50.0 million, including $48.3 million in connection with the 2019 Strategic Shift. The Company expects that none of the foregoing charges will result in future cash expenditures.
Forward-Looking Statements
This Current Report on Form 8-K/A contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Current Report on Form 8-K/A that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our strategic shift, the estimated financial impact of this change in strategy, including anticipated costs and impairment charges, and the timing of expected store closures and/or divestitures. These forward-looking statements are based on management’s current expectations.
These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but