Property and Equipment (Notes)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment Disclosure [Text Block]

The major classes of assets and total accumulated depreciation and amortization were as follows:


		As of December 31,
(in thousands)	Average Useful Life	2021		2020
Land and building	27.5 (Building)	$	968	$	882
Leasehold improvements	Lesser of remaining lease or asset life	85,137		88,012
Machinery and equipment	10 years	7,864		6,340
Furniture and fixtures	3 to 5 years	11,650		11,201
Computer equipment and software	3 to 10 years	72,857		71,601
Construction in progress		671		744
		179,147		178,780
Less impairment (1)		(14,701)		(14,712)
Less accumulated depreciation and amortization		(128,656)		(120,800)
Property and equipment - net		$	35,790	$	43,268

(1) Due to COVID-19 pandemic, impairment was recorded related to stores (see below for further explanation). In 2021, impairments are net of disposals.

Depreciation and amortization expense related to property and equipment included in operating expenses amounted to approximately $12,533, $13,350 and $15,933 in 2021, 2020 and 2019, respectively. Includes computer software amortization expense for 2021, 2020 and 2019 of $3,135, $3,007 and $2,788, respectively.

Property and equipment, along with other long-lived assets, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. In 2020, due to the impact of the COVID-19 pandemic on the Company’s operations and the decline in the retail real estate market, the Company

identified indicators of impairment for long-lived assets at certain retail stores. In 2021, the Company identified indicators of impairment for long-lived assets at certain retail stores. For such stores, the Company performed a recoverability test, comparing estimated undiscounted cash flows to the carrying value of the related long-lived assets. When the carrying value was more than the estimated undiscounted cash flows, the Company determined that an impairment test was required. Fair values of the long-lived assets were estimated using an income approach based on management’s forecast of future cash flows derived from continued retail operations and the fair values of individual operating lease assets were determined using estimated market rental rates. Significant estimates are used in determining future cash flows of each store over its remaining lease term, including the Company's expectations of future projected cash flows that include revenues, operating expenses, and market conditions. An impairment loss is recorded if the carrying amount of the long-lived asset group exceeds its fair value. As a result, the Company recorded impairment charges of $409 and $14,712 related to furniture fixtures and leasehold improvements for the year ended December 31, 2021, and 2020, respectively. The impairment charges were recorded in the Direct-to-Consumer segment.