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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | The following provides a rollforward of the carrying amount of goodwill by reporting unit for the period ended September 30, 2024:
|  | Wholesale |  |  |  | Net Carrying Amount
|  | Footwear |  | Accessories/ Apparel |  | Direct-to-Consumer (1) |
Balance at January 1, 2024 |  | $ | 90,663 |  |  | $ | 73,625 |  |  | $ | 15,715 |  |  | $ | 180,003 |
Acquisitions and divestitures |  | — |  |  | 641 |  |  | 2,383 |  |  | 3,024 |
Translation |  | (136) |  |  | — |  |  | (986) |  |  | (1,122) |
Balance at September 30, 2024 |  | $ | 90,527 |  |  | $ | 74,266 |  |  | $ | 17,112 |  |  | $ | 181,905 |
(1)During the third quarter of 2024, we completed the sale of our GREATS® business, which was previously included within our Direct-to-Consumer reporting unit. Goodwill decreased $700 related to the divestiture. See Note C – Acquisitions, Divestitures, and Purchases and Sales of Joint Ventures, for further information. The following table details identifiable intangible assets as of September 30, 2024:
|  | Estimated Lives(1) |  | Cost Basis |  | Accumulated Amortization |  | Impairment & Other(1)(2)(3)(4) |  | Net Carrying Amount
Trademarks |  | 10-20 years |  | $ | 32,195 |  |  | $ | (16,652) |  |  | $ | (15,543) |  |  | $ | — |
Customer relationships |  | 10-20 years |  | 62,580 |  |  | (29,457) |  |  | (2,603) |  |  | 30,520 |
Re-acquired rights |  | 2 years |  | 1,450 |  |  | (461) |  |  | — |  |  | 989 |
|  |  |  | 96,225 |  |  | (46,570) |  |  | (18,146) |  |  | 31,509 |
Re-acquired right |  | indefinite |  | 35,200 |  |  | — |  |  | (8,908) |  |  | 26,292 |
Trademarks |  | indefinite |  | 58,833 |  |  | — |  |  | (8,326) |  |  | 50,507 |
|  |  |  | $ | 190,258 |  |  | $ | (46,570) |  |  | $ | (35,380) |  |  | $ | 108,308 |
(1) During the first quarter of 2024, the Company changed its estimate of useful life of its GREATS® trademark from indefinite to 10 years. As a result, the Company reassessed the carrying amount of its GREATS® trademark for impairment in accordance with ASC 350, Intangibles – Goodwill and Other. Based on this assessment, the Company determined that the GREATS® trademark was impaired and recognized an impairment charge of $1,700, which was recorded within Impairment of intangibles in our Condensed Consolidated Statement of Income for the nine months ended September 30, 2024. The Company started amortizing the GREATS® trademark over its revised useful life beginning in the second quarter of 2024. (2) During the third quarter of 2024, the Company completed the sale of its GREATS® business. As part of the divestiture, the remaining carrying amounts of the net intangible assets of GREATS®, which included a trademark of $4,287 and customer relationships of $861, were written off, resulting in a total charge of $5,148, which was recorded within operating expenses in our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024. See Note C – Acquisitions, Divestitures, and Purchases and Sales of Joint Ventures, for further information. (3) During the third quarter of 2024, the Company decided to discontinue the use of its Almost Famous brand and transition its marketing and sales efforts under the Madden Girl brand. As a result of this decision, the Company reassessed the carrying amount of its Almost Famous trademark for impairment in accordance with ASC 350, Intangibles – Goodwill and Other. Based on this assessment, the Company determined that the estimated future cash flows related to the Almost Famous trademark was less than its carrying value, and therefore, the asset was impaired. As such, the Company recognized an impairment charge of $8,635, representing the remaining carrying amount of the asset, which was recorded within Impairment of intangibles in our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024. Prior to writing off the Almost Famous trademark, it was recorded within our Wholesale Apparel/Accessories segment. (4) Includes the effect of foreign currency translation related primarily to the movements of the Canadian dollar and Mexican peso in relation to the U.S. dollar. The following table details identifiable intangible assets as of December 31, 2023:
|  | Estimated Lives |  | Cost Basis(1) |  | Accumulated Amortization |  | Impairment & Other(2)(3) |  | Net Carrying Amount
Trademarks |  | 20 years |  | $ | 27,745 |  |  | $ | (16,263) |  |  | $ | (2,545) |  |  | $ | 8,937 |
Customer relationships |  | 10-20 years |  | 62,580 |  |  | (27,267) |  |  | (1,382) |  |  | 33,931 |
|  |  |  | 90,325 |  |  | (43,530) |  |  | (3,927) |  |  | 42,868 |
Re-acquired right |  | indefinite |  | 35,200 |  |  | — |  |  | (8,862) |  |  | 26,338 |
Trademarks |  | indefinite |  | 63,283 |  |  | — |  |  | (6,222) |  |  | 57,061 |
|  |  |  | $ | 188,808 |  |  | $ | (43,530) |  |  | $ | (19,011) |  |  | $ | 126,267 |
(1) During the year ended December 31, 2023, the Company acquired Almost Famous, which consisted of a trademark of $9,050 and customer relationships of $23,900, both of which are amortized over 20 years. (2) During the year ended December 31, 2023, the Company recorded an impairment charge of $6,520 related to the GREATS® trademark. (3) Includes the effect of foreign currency translation related primarily to the movements of the Canadian dollar and Mexican peso in relation to the U.S. dollar. The Company evaluates its goodwill and indefinite-lived intangible assets for impairment at least annually in the beginning of the third quarter of each year and whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The Company also periodically performs a quantitative test to assess its goodwill and indefinite-lived intangibles for impairment in lieu of using the qualitative approach in order to reassess the fair values of its reporting units and indefinite-lived intangible assets. A quantitative assessment of goodwill and indefinite-lived intangible assets was performed as of July 1, 2023. In conducting the quantitative impairment assessments for goodwill and indefinite-lived intangibles, the Company concluded that the fair values of its reporting units exceeded their carrying values and the fair values of its indefinite-lived intangibles exceeded their respective carrying values. Impairment of GREATS® intangible assets In the fourth quarter of 2023, certain circumstances occurred that indicated potential impairment and the Company performed a valuation of the GREATS® trademark. The estimated fair value of this trademark was determined using an excess earnings method, incorporating the use of projected financial information and a discount rate of 14.8% which was developed using market participant based assumptions. Changes in these significant unobservable inputs might result in a significantly higher or lower fair value measurement. As a result of this assessment, the GREATS® trademark was written down from the carrying value of $12,670 to its fair value of $6,150, resulting in a pre-tax non-cash impairment charge of $6,520. In the first quarter of 2024, circumstances occurred that caused a change in the estimated useful life of the GREATS® trademark from an indefinite life to an estimated useful life of 10 years, and as a result, the Company performed an impairment test. The estimated fair value of this trademark was determined using an excess earnings method, incorporating the use of projected financial information and a discount rate of 14.0% which was developed using market participant based assumptions. Changes in these significant unobservable inputs might result in a significantly higher or lower fair value measurement. As a result of this assessment, the GREATS® trademark was written down from the carrying value of $6,150 to its fair value of $4,450, resulting in a pre-tax non-cash impairment charge of $1,700. During the third quarter of 2024, the Company completed the sale of its GREATS® business. As part of the divestiture, the remaining carrying amounts of the net intangible assets of GREATS®, which included a trademark of $4,287 and customer relationships of $861, were written off, resulting in a total charge of $5,148, which was recorded within operating expenses in our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024. See Note C – Acquisitions, Divestitures, and Purchases and Sales of Joint Ventures, for further information. These impairment charges were recorded in impairment of intangibles in the Company’s Consolidated Statements of Income and recognized in the Direct-to-Consumer segment. A quantitative assessment of goodwill and indefinite-lived intangible assets was performed as of July 1, 2024. In conducting the quantitative impairment assessments for goodwill and indefinite-lived intangibles, the Company concluded that the fair values of its reporting units exceeded their carrying values and the fair values of its indefinite-lived intangibles exceeded their respective carrying values. In conducting the qualitative impairment assessment for goodwill and indefinite-lived intangibles, the Company concluded that it is more likely than not that the fair values of its reporting units exceeded their carrying values and the fair values of its indefinite-lived intangibles exceeded their respective carrying values. Therefore, in 2024, as a result of the annual test, no impairment charges were recorded for goodwill and intangibles. The amortization of intangible assets amounted to $1,147 and $3,270 for the three and nine months ended September 30, 2024 compared to $463 and $1,347 for the three and nine months ended September 30, 2023 and is included in operating expenses in the Company's Condensed Consolidated Statements of Income. The estimated future amortization expense for intangibles as of September 30, 2024 was as follows:
2024 (remaining three months) | $ | 907 |
2025 | 3,626 |
2026 | 2,876 |
2027 | 2,633 |
2028 | 2,598 |
Thereafter | 18,869 |
Total | $ | 31,509 |

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