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Goodwill and intangibles | 12 Months Ended
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Feb. 01, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and intangibles | Goodwill and intangibles The following summarizes the activity of the Company’s goodwill and intangible assets during the periods presented: Fiscal 2023 During Fiscal 2023, the Company completed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names, and through the qualitative assessment, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceeded their fair values. In connection with the acquisition of Blue Nile on August 19, 2022, the Company recognized $96.0 million of indefinite-lived intangible assets and $256.8 million of goodwill, which are reported in the North America reportable segment. Refer to Note 4 for additional information. During Fiscal 2023, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived intangible assets exceeded their fair values. Fiscal 2024 During Fiscal 2024, the Company completed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names. The Company utilized the qualitative assessment for all reporting units and trade names, except the Digital brands and Diamonds Direct reporting units and trade names, for which the quantitative assessment was utilized. Through the qualitative assessment, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceeded their fair values. The Company noted no impairment through the quantitative assessments based on the estimated fair values of the reporting units and trade names exceeding their carrying values. During the fourth quarter of Fiscal 2024, the Company determined a triggering event had occurred requiring an interim impairment assessment for the Blue Nile trade name which management performed on a quantitative basis. The Company noted no impairment based on the estimated fair value of the trade name approximating its carrying value. The Company did not identify any other events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived intangible assets exceeded their fair values during Fiscal 2024. Fiscal 2025 During Fiscal 2025, the Company completed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names. The Company utilized the qualitative assessment for all reporting units and trade names, except the Digital brands and Diamonds Direct reporting units and the Diamonds Direct and Blue Nile trade names, for which the quantitative assessment was utilized. Through the qualitative assessment, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceeded their fair values. As part of the quantitative assessments, management reevaluated its long-term cash flow projections, primarily related to sales growth in the Digital brands and Diamonds Direct. Both brands have a higher bridal mix compared to the rest of Signet, and thus the slower than expected engagement recovery and continued pressure on consumer discretionary spending have had a disproportionate impact on these businesses as compared to the other Signet brands. In addition, to a lesser degree, the Digital brands sales have been impacted by market declines in lab-grown diamond pricing over the past year. Management also determined an increase in discount rates was required to reflect the current interest rate environment at the valuation date, as well as to reflect additional forecast risk related to the Digital brands due to the previously discussed challenges related to the integration of Blue Nile. Therefore, these higher discount rates, in conjunction with the revised cash flow projections, resulted in lower than previously projected discounted cash flows for the reporting units and trade names which negatively affected the valuations compared to previous valuations. Based on the results of the quantitative impairment assessments, the Company determined that no impairment was required for the Diamonds Direct reporting unit, as its estimated fair value exceeded its carrying value. However, during the second quarter of Fiscal 2025, the Company recognized pre-tax impairment charges in the consolidated statement of operations within its North America reportable segment related to the Diamonds Direct trade name, the Digital brands reporting unit, and the Blue Nile trade name of $7 million, $123 million and $36 million, respectively, as their respective carrying values exceeded their fair values. As a result of these impairments, as of the annual valuation date of June 1, 2024, the carrying values of the Diamonds Direct trade name, Digital brands goodwill, and Blue Nile trade name were reduced to their estimated fair values of $119 million, $203.1 million, and $60 million, respectively. During the fourth quarter of Fiscal 2025, primarily due to softer than expected Holiday Season results, the Company determined triggering events had occurred requiring interim impairment assessments for the Digital brands reporting unit as well as the Blue Nile, James Allen and Diamonds Direct trade names, which management performed on a quantitative basis. As part of the quantitative assessments, management reevaluated its long-term cash flow projections, primarily related to sales growth in the Digital brands and Diamonds Direct. As described above, the slower than expected engagement recovery continued in the second half of Fiscal 2025, which had a disproportionate impact on these businesses due to their higher bridal mix compared to the rest of Signet. Management also determined an increase in discount rates was required to reflect the current interest rate environment at the valuation date, as well as to reflect additional forecast risk related to the Digital brands due to the previously discussed challenges related to the integration of Blue Nile. The Digital brands’ results were also impacted by lower traffic post re-platforming due to search engine optimization during the second half of the year. Therefore, these higher discount rates, in conjunction with the revised cash flow projections, resulted in lower than previously projected discounted cash flows for the reporting unit and trade names which negatively affected the fair value estimates compared to previous valuations. The Company recognized pre-tax impairment charges in the consolidated statement of operations within its North America reportable segment related to the Digital brands reporting unit, Blue Nile trade name, James Allen trade name, and the Diamonds Direct trade name of $149.5 million, $41 million, $3 million, and $7 million, respectively, as their respective carrying values exceeded their fair values. As a result of these impairments, as of February 1, 2025, the carrying values of the Digital brands goodwill, Blue Nile trade name, James Allen trade name, and Diamonds Direct trade name were reduced to their estimated fair values of $53.6 million, $19 million, $15 million, and $112 million, respectively. The Company did not identify any other events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived intangible assets exceed their fair values during Fiscal 2025. Management noted uncertainties exist related to the post-election macroeconomic environment in the US and abroad, including tariffs, economic and tax policy, inflation and interest rates. These factors could unfavorably impact consumer confidence and discretionary spending, and thus may impact the key assumptions used to estimate fair value, such as sales trends, margin trends, long-term growth rates and discount rates. These factors could also negatively affect the share price of the Company’s common stock. An increase in the discount rate and/or a further softening of sales and operating income trends for any of the Company’s reporting units and related trade names, particularly during peak selling seasons, could result in a further decline in the estimated fair values of the indefinite-lived intangible assets, including goodwill, which could result in future material impairment charges, particularly for Diamonds Direct and Digital brands as described above. Goodwill The following table summarizes the Company’s goodwill by reportable segment:
(in millions) | North America |  |  |  |  |  |
Balance at January 28, 2023 (1) | $ | 751.7 |  |  |  |  |  |  |
Acquisitions (2) | 2.8 |  |  |  |  |  |  |
Balance at February 3, 2024 (1) | $ | 754.5 |  |  |  |  |  |  |
Impairments | (272.5) |  |  |  |  |  |  |
Balance at February 1, 2025 (1) | $ | 482.0 |  |  |  |  |  |  |
(1) The carrying amount of goodwill is presented net of accumulated impairment losses of $848.5 million as of February 1, 2025 and $576.0 million as of February 3, 2024 and January 28, 2023. (2) The change in goodwill during the period primarily consists of the acquisition of SJR and the finalization of the purchase price allocation of Blue Nile. Refer to Note 4 for additional information. Intangibles Definite-lived intangible assets include trade names, technology and customer relationship assets. Indefinite-lived intangible assets consist of trade names. Both definite and indefinite-lived assets are recorded within intangible assets, net on the consolidated balance sheets. Intangible liabilities, net consists of unfavorable contracts and is recorded within accrued expenses and other current liabilities and other liabilities - non-current on the consolidated balance sheets. The following table provides additional detail regarding the composition of intangible assets and liabilities as of February 1, 2025 and February 3, 2024:
|  | February 1, 2025 |  | February 3, 2024
(in millions) |  | Gross carrying amount |  | Accumulated amortization |  |  |  | Net carrying amount |  | Gross carrying amount |  | Accumulated amortization |  |  |  | Net carrying amount
Intangible assets, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Definite-lived intangible assets |  | $ | 11.2 |  |  | $ | (8.4) |  |  |  |  | $ | 2.8 |  |  | $ | 11.2 |  |  | $ | (7.5) |  |  |  |  | $ | 3.7 |
Indefinite-lived intangible assets (1) |  | 304.4 |  |  | — |  |  |  |  | 304.4 |  |  | 399.1 |  |  | — |  |  |  |  | 399.1 |
Total intangible assets, net |  | $ | 315.6 |  |  | $ | (8.4) |  |  |  |  | $ | 307.2 |  |  | $ | 410.3 |  |  | $ | (7.5) |  |  |  |  | $ | 402.8 |
Intangible liabilities, net |  | $ | (38.0) |  |  | $ | 36.2 |  |  |  |  | $ | (1.8) |  |  | $ | (38.0) |  |  | $ | 34.4 |  |  |  |  | $ | (3.6) |
(1) The change in the indefinite-lived intangible asset balances during the periods presented was primarily due to the trade name impairment charges as described above. Amortization expense relating to intangible assets was $0.9 million in Fiscal 2025 (Fiscal 2024: $1.9 million; Fiscal 2023: $2.3 million). Unfavorable contracts are classified as liabilities and amortization is recognized over the term of the underlying contract. Amortization relating to intangible liabilities was $1.8 million in Fiscal 2025 (Fiscal 2024: $1.8 million; Fiscal 2023: $1.8 million). Expected future amortization for intangible assets and intangible liabilities recorded at February 1, 2025 is as follows:
(in millions) | Intangible assets amortization |  | Intangible liabilities amortization
Fiscal 2026 | $ | 0.5 |  |  | $ | (1.8) |
Fiscal 2027 | 0.5 |  |  | — |
Fiscal 2028 | 0.5 |  |  | — |
Fiscal 2029 | 0.4 |  |  | — |
Fiscal 2030 | 0.4 |  |  | — |
Thereafter | 0.5 |  |  | — |
Total | $ | 2.8 |  |  | $ | (1.8) |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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