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Trademarks, Licenses and Other Intangible Assets

12 Months Ended

Dec. 31, 2018

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Trademarks, Licenses and Other Intangible Assets

(8)

Trademarks, Licenses and Other Intangible Assets

2018	Gross Amount		Accumulated Amortization		Net Book Value
Trademarks (indefinite lives)	$	123,287	$	—	$	123,287
Trademarks (finite lives)		44,300		69		44,231
Licenses (finite lives)		85,100		50,539		34,561
Other intangible assets (finite lives)		13,619		11,373		2,246
Subtotal		143,019		61,981		81,038
Total	$	266,306	$	61,981	$	204,325

2017	Gross Amount		Accumulated Amortization		Net Book Value
Trademarks (indefinite lives)	$	129,033	$	—	$	129,033
Trademarks (finite lives)		46,461		72		46,389
Licenses (finite lives)		69,439		46,857		22,582
Other intangible assets (finite lives)		14,949		12,458		2,491
Subtotal		130,849		59,387		71,462
Total	$	259,882	$	59,387	$	200,495

Amortization expense was $7.0 million, $6.0 million and $5.9 million in 2018, 2017 and 2016, respectively. Amortization expense is expected to approximate $5.0 million, $4.6 million, and $4.0 million in 2019, 2020, 2021, respectively, and $3.7 million 2022 and 2023. The weighted average amortization period for trademarks, licenses and other intangible assets with finite lives are 18 years, 14 years and 2 years, respectively, and 14 years on average.

The Company reviews intangible assets with indefinite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In 2017, the Company set in motion a plan to discontinue some of its mass market product lines over the next few years. As a result, the Company recorded an impairment loss of $2.1 million as of December 31, 2017. There were no impairment charges for trademarks with indefinite useful lives in 2018 and 2016. The fair values used in our evaluations are estimated based upon discounted future cash flow projections using a weighted average cost of capital of 6.21% as of December 31, 2018 and 6.22% as of December 31, 2017 and 2016. The cash flow projections are based upon a number of assumptions, including, future sales levels and future cost of goods and operating expense levels, as well as economic conditions, changes to our business model or changes in consumer acceptance of our products which are more subjective in nature. The Company believes that the assumptions it has made in projecting future cash flows for the evaluations described above are reasonable and currently no other impairment indicators exist for our indefinite-lived assets. However, if future actual results do not meet our expectations, the Company may be required to record an impairment charge, the amount of which could be material to our results of operations.

The cost of trademarks, licenses and other intangible assets with finite lives is being amortized by the straight-line method over the term of the respective license or the intangible assets estimated useful life which range from three to twenty years. If the residual value of a finite life intangible asset exceeds its carrying value, then the asset is not amortized. The Company reviews intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Product sales of our Karl Lagerfeld brand did not met with our original expectations. Accordingly, in 2016, the Company recorded an impairment loss of $5.7 million.

Trademarks (finite lives) primarily represent Lanvin brand names and trademarks and in connection with their purchase, Lanvin was granted the right to repurchase the brand names and trademarks in 2025 for the greater of €70 million (approximately $80 million) or one times the average of the annual sales for the years ending December 31, 2023 and 2024 (residual value). Because the residual value of the intangible asset exceeds its carrying value, the asset is not amortized.