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INCOME TAXES | 12 Months Ended
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Jan. 31, 2023
INCOME TAXES [Abstract] |
INCOME TAXES | NOTE 9 — INCOME TAXES ​ The income tax provision is comprised of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended January 31,
​ |  | 2023 |  | 2022 |  | 2021
​ | ​ | (In thousands)
Current | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | $ | 27,982 | ​ | $ | 39,283 | ​ | $ | (15,828)
State and city | ​ | ​ | 8,278 | ​ | ​ | 4,484 | ​ | ​ | (491)
Foreign | ​ | ​ | 14,647 | ​ | ​ | 5,991 | ​ | ​ | 3,803
​ | ​ | ​ | 50,907 | ​ | ​ | 49,758 | ​ | ​ | (12,516)
Deferred | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | ​ | (50,764) | ​ | ​ | 17,090 | ​ | ​ | 22,770
State and city | ​ | ​ | (4,457) | ​ | ​ | 2,116 | ​ | ​ | 3,364
Foreign | ​ | ​ | 526 | ​ | ​ | 1,911 | ​ | ​ | (1,415)
​ | ​ | ​ | (54,695) | ​ | ​ | 21,117 | ​ | ​ | 24,719
Income tax expense (benefit) | ​ | $ | (3,788) | ​ | $ | 70,875 | ​ | $ | 12,203
Income (loss) before income taxes | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
United States | ​ | $ | (106,086) | ​ | $ | 234,034 | ​ | $ | 37,727
Non-United States | ​ | ​ | (32,084) | ​ | ​ | 36,942 | ​ | ​ | (2,001)
​ | ​ | $ | (138,170) | ​ | $ | 270,976 | ​ | $ | 35,726
​ The United States government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020, which includes various income tax provisions aimed at providing economic relief. One of those provisions allows any loss generated in fiscal 2021 to be carried back to each of the 5 taxable years preceding the taxable year of such a loss. The Company elected to use this relief and carried back the fiscal 2021 tax loss to a tax year with a 35% federal rate. Additionally, the CARES Act permits Qualified Improvement Property to qualify for 15-year depreciation and therefore be also eligible for 100 percent first-year bonus depreciation. The Company has elected to take 100% bonus depreciation for all qualified improvement property. ​ Effective January 1, 2018, the Tax Cuts and Jobs Act (“TCJA”) subjects a U.S. parent company to current tax on its global intangible low-taxed income (“GILTI”). For fiscal 2023, the Company has elected to treat the tax effect of GILTI as a current period expense. ​ The significant components of the Company’s net deferred tax asset at January 31, 2023 and 2022 are summarized as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2023 |  | 2022
​ | ​ | (In thousands)
Deferred income tax assets: | ​ | ​ | ​ | ​ | ​ | ​
Compensation | ​ | $ | 879 | ​ | $ | 1,807
Inventory | ​ | ​ | 12,197 | ​ | ​ | 7,918
Provision for bad debts and sales allowances | ​ | ​ | 15,237 | ​ | ​ | 15,972
Supplemental employee retirement plan | ​ | ​ | 688 | ​ | ​ | 710
Net operating loss | ​ | ​ | 33,749 | ​ | ​ | 10,949
Operating lease liability | ​ | ​ | 56,519 | ​ | ​ | 32,721
Foreign tax credit carryforward | ​ | ​ | 3,865 | ​ | ​ | 2,805
Section 174 R&D amortization | ​ | ​ | 478 | ​ | ​ | —
Other | ​ | ​ | — | ​ | ​ | 782
Gross deferred income tax assets | ​ | ​ | 123,612 | ​ | ​ | 73,664
Less: valuation allowance | ​ | ​ | (33,087) | ​ | ​ | (14,481)
Net deferred income tax assets | ​ | ​ | 90,525 | ​ | ​ | 59,183
Deferred income tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​
Depreciation and amortization | ​ | ​ | (6,268) | ​ | ​ | (56,901)
Intangibles | ​ | ​ | (48,760) | ​ | ​ | (9,576)
Operating lease asset | ​ | ​ | (50,995) | ​ | ​ | (27,272)
Accrued expenses | ​ | ​ | (57) | ​ | ​ | (59)
Prepaid expenses and other | ​ | ​ | (2,279) | ​ | ​ | (1,826)
Other | ​ | ​ | (560) | ​ | ​ | —
Total deferred income tax liabilities | ​ | ​ | (108,919) | ​ | ​ | (95,634)
Net deferred tax liabilities | ​ | $ | (18,394) | ​ | $ | (36,451)
​ The total undistributed earnings of the Company’s foreign subsidiaries are approximately $155 million for the fiscal year ended January 31, 2023. Upon distribution of those earnings in the form of dividends, the Company does not anticipate any material tax costs. As such, no deferred taxes have been provided for withholding taxes or other taxes that would result upon repatriation of undistributed foreign earnings. Those earnings are considered indefinitely reinvested. Even though the undistributed earnings could have been distributed back generally without U.S. federal income tax as a result of the one-time transition tax under the TCJA regime, the Company does not expect to change its indefinite reinvestment categorization with respect to those earnings. ​ The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the financial statements for the years ended January 31: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2023 |  | ​ | 2022 |  | ​ | 2021 | ​
Provision for Federal income taxes at the statutory rate | ​ | 21.0 | % | ​ | 21.0 | % | ​ | 21.0 | %
State and local income taxes, net of Federal tax benefit | ​ | (2.1) | ​ | ​ | 2.0 | ​ | ​ | (0.6) | ​
Permanent differences | ​ | (2.1) | ​ | ​ | 2.8 | ​ | ​ | 6.6 | ​
U.S. tax on foreign earnings(1) | ​ | (6.0) | ​ | ​ | 1.5 | ​ | ​ | 6.2 | ​
Foreign tax rate differential | ​ | 1.2 | ​ | ​ | — | ​ | ​ | (0.3) | ​
Share-based payments | ​ | (0.1) | ​ | ​ | — | ​ | ​ | 12.5 | ​
Foreign tax credit | ​ | 7.9 | ​ | ​ | (3.4) | ​ | ​ | (7.3) | ​
Valuation allowance | ​ | (3.1) | ​ | ​ | 0.8 | ​ | ​ | 13.7 | ​
Net operating loss carryback | ​ | — | ​ | ​ | — | ​ | ​ | (18.6) | ​
Goodwill Impairment | ​ | (17.3) | ​ | ​ | — | ​ | ​ | — | ​
Non-taxable capital gain | ​ | 5.1 | ​ | ​ | — | ​ | ​ | — | ​
Other, net | ​ | (1.8) | ​ | ​ | 1.5 | ​ | ​ | 1.0 | ​
Actual provision for income taxes | ​ | 2.7 | % | ​ | 26.2 | % | ​ | 34.2 | %
(1) | Prior year U.S. tax on foreign earnings has been reclassed for presentation purposes.
​ The Company’s effective tax rate decreased 23.5% percent in fiscal 2023 compared to fiscal 2022. This decrease in the Company’s effective tax rate is primarily the result of the Company’s charges related to goodwill impairment of $347.2 million which significantly decreased pretax book income in relation to its tax expense. The Company’s effective tax rate decreased 8.0% percent in fiscal 2022 as compared to fiscal 2021. The decrease in the Company’s fiscal 2022 effective tax rate compared to the fiscal 2021 effective tax rate is primarily the result of the Company’s significant increase in pretax book income in relation to its tax expense. ​ At January 31, 2023, the Company had state net operating loss carryforwards of $4.7 million that expire at various times beginning in 2023. In addition, the Company had foreign net operating loss carryforwards of $28.9 million, some jurisdictions having indefinite expirations. The Company also has federal foreign tax credit carryforwards of $3.9 million, which expire beginning in 2030. ​ Valuation allowances represent deferred tax benefits where management is uncertain if the Company will have the ability to recognize those benefits in the future. During the year ended January 31, 2023, the Company recorded an additional valuation allowance of $18.6 million against its deferred tax assets, of which $14 million relates to opening balance sheet adjustments on the Karl Lagerfeld acquisition and $4.6 million relates to standalone state tax losses and foreign retail losses. ​ Unrecognized Tax Benefits ​ A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (excluding interest and penalties) is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2023 |  | 2022 |  | 2021
​ | ​ | (In thousands)
Balance at February 1, | ​ | $ | 2,442 | ​ | $ | 2,293 | ​ | $ | 2,111
Additions based on tax positions related to the current year | ​ | ​ | 245 | ​ | ​ | — | ​ | ​ | —
Additions for tax positions of prior years | ​ | ​ | 895 | ​ | ​ | 595 | ​ | ​ | 182
Lapses of statues of limitations | ​ | ​ | — | ​ | ​ | (446) | ​ | ​ | —
Balance at January 31, | ​ | $ | 3,582 | ​ | $ | 2,442 | ​ | $ | 2,293
​ The Company accounts for uncertain income tax positions in accordance with ASC 740 —Income Taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of January 31, 2023, there was an increase in the unrecognized tax position reserve of $1.1 million related to state and local income tax return filings. The Company’s policy on classification is to include interest in interest and financing charges, net and penalties in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income (loss). The Company and certain of its subsidiaries are subject to U.S. Federal income tax as well as the income tax of multiple state, local, and foreign jurisdictions. Of the major jurisdictions, the Company and its subsidiaries are subject to examination in the United States and various foreign jurisdictions for fiscal year 2014 and forward. The Company is currently under audit examination by New York, New Jersey and France for fiscal years 2016 through 2019. The Company believes that it is reasonably possible there will be no change to its unrecognized income tax position reserves during the next twelve months due to the applicable statues of limitations.

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