Leases

3 Months Ended

Mar. 31, 2023

The Company leases its corporate offices, retail spaces and authentication centers under various noncancelable operating leases with terms ranging from one year to fifteen years.

The Company recorded operating lease costs of $7.1 million and $7.2 million for the three months ended March 31, 2023 and 2022, respectively. The Company also incurred $1.3 million and $1.5 million of variable lease costs for the three months ended March 31, 2023 and 2022, respectively. The variable lease costs are comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance.

Due to the office and store closures in the three months ended March 31, 2023, the Company reviewed its right-of-use assets for impairment. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows using discount rate and other quantitative and qualitative factors. As a result, the Company recorded $25.7 million related to the impairment of certain office and store right-of-use assets. The impairment charges are included in restructuring charges in the condensed statements of operations.

Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):


Fiscal Year	Amount
Remainder of 2023	$	21,350
2024	28,073
2025	28,213
2026	27,772
2027	21,410
Thereafter	38,033
Total future minimum payments	$	164,851
Less: Imputed interest	(26,607)
Present value of operating lease liabilities	$	138,244

Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating cash flows used for operating leases	$	8,231	$	6,101
Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications)	$	(1,493)	$	25

The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows:


	March 31, 2023
Weighted average remaining lease term	6.0 years
Weighted average discount rate	6.2	%

The Company has leases for certain vehicles and equipment that are classified as finance leases. The finance lease right-of-use asset and finance lease liabilities for these vehicle and equipment leases are immaterial as of March 31, 2023 and December 31, 2022.