GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 28, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

The balances and changes in the carrying amount of goodwill attributable to each segment were as follows:



(dollars in thousands)	U.S. Retail		U.S. Wholesale		International			Total
Balance at December 29, 2018	$	83,934	74,454		$	68,713		$	227,101
Foreign currency impact	—		—		918			918
Balance at March 30, 2019	$	83,934	$	74,454	$	69,631		$	228,019

Balance at December 28, 2019	$	83,934	$	74,454	$	70,638		$	229,026
Goodwill impairment^(*)	—		—		(17,742		)	(17,742		)
Foreign currency impact	—		—		(3,564		)	(3,564		)
Balance at March 28, 2020	$	83,934	$	74,454	$	49,332		$	207,720


(*)	In the first quarter of fiscal 2020, a charge of $17.7 million was recorded to reflect the impairment of the value ascribed to the goodwill in the Other International reporting unit in the International segment.

A summary of the carrying value of the Company's intangible assets were as follows:



		March 28, 2020						December 28, 2019
(dollars in thousands)	Weighted-average useful life	Gross amount		Accumulated amortization		Net amount		Gross amount		Accumulated amortization		Net amount
Carter's tradename	Indefinite	$	220,233	$	—	$	220,233	$	220,233	$	—	$	220,233
OshKosh tradename⁽¹⁾	Indefinite	70,000		—		70,000		85,500		—		85,500
Skip Hop tradename⁽²⁾	Indefinite	15,000		—		15,000		26,000		—		26,000
Finite-life tradenames	5-20 years	3,911		1,064		2,847		3,911		1,002		2,909
Total tradenames, net		$	309,144	$	1,064	$	308,080	$	335,644	$	1,002	$	334,642

Skip Hop customer relationships	15 years	$	47,300	$	9,451	$	37,849	$	47,300	$	8,657	$	38,643
Carter's Mexico customer relationships	10 years	2,790		854		1,936		3,258		775		2,483
Total customer relationships, net		$	50,090	$	10,305	$	39,785	$	50,558	$	9,432	$	41,126


(1)	In the first quarter of fiscal 2020, a charge of $13.6 million, $1.6 million, and $0.3 million was recorded on our indefinite-lived OshKosh tradename asset in the U.S. Retail, U.S. Wholesale, and International segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived OshKosh tradename asset.

(2)

In the first quarter of fiscal 2020, a charge of $6.8 million, $3.7 million, and $0.5 million was recorded on our indefinite-lived Skip Hop tradename asset in the U.S. Wholesale, International, and U.S. Retail segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived Skip Hop tradename asset. Fiscal 2019 includes a tradename impairment charge of $30.8 million.



		March 30, 2019
(dollars in thousands)	Weighted-average useful life	Gross amount		Accumulated amortization		Net amount
Carter's tradename	Indefinite	$	220,233	$	—	$	220,233
OshKosh tradename	Indefinite	85,500		—		85,500
Skip Hop tradename	Indefinite	56,800		—		56,800
Finite-life tradenames	5-20 years	3,911		814		3,097
Total tradenames, net		$	366,444	$	814	$	365,630

Skip Hop customer relationships	15 years	$	47,300	$	6,274	$	41,026
Carter's Mexico customer relationships	10 years	3,179		536		2,643
Total customer relationships, net		$	50,479	$	6,810	$	43,669

The carrying values of goodwill and indefinite-lived tradename assets are subject to annual impairment reviews as of the last day of each fiscal year. Between annual assessments, impairment reviews may also be triggered by any significant events or changes in circumstances affecting our business. Due to the decrease in the Company's market capitalization, lower than expected actual sales, and lower projected sales and profitability primarily due to the impacts from the outbreak of a new strain of coronavirus ("COVID-19"), the Company concluded that impairment indicators existed for the first quarter of fiscal 2020. As a result, the Company conducted interim quantitative impairment assessments on the goodwill ascribed to the Other International reporting unit recorded in connection with the allocation of goodwill to the newly created International segment as a result of the acquisition of Bonnie Togs in 2011 and on the value of the Company's indefinite-lived Skip Hop and OshKosh tradename assets that was recorded in connection with the acquisition of Skip Hop Holdings, Inc. in February 2017 and OshKosh B'Gosh Inc. in July 2005, respectively.

The goodwill impairment assessment for the Other International reporting unit was performed in accordance with ASC 350, "Intangibles--Goodwill and Other" ("ASC 350") and compares the carrying value of the Other International reporting unit to its fair value. Consistent with prior practice, the fair value of the Other International reporting unit was determined using discounted cash flows ("income approach") and relevant data from guideline public companies ("market approach"). As a result of this assessment, a goodwill impairment charge of $17.7 million was recorded to our Other International reporting unit in the International segment. The goodwill impairment charge recorded on our Other International reporting unit included charges of $9.4 million, $5.2 million, and $3.1 million to Skip Hop, Carter's, and Carter's Mexico goodwill.

The Skip Hop and OshKosh indefinite-lived tradename asset assessments were performed in accordance with ASC 350 and were determined using a discounted cash flow analysis which examined the hypothetical cost savings that accrue as a result of not having to license the tradename from another owner. Based on these assessments, charges of $11.0 million and $15.5 million were recorded on our indefinite-lived Skip Hop and OshKosh tradename assets, respectively. The charge recorded on our indefinite-lived Skip Hop tradename asset included charges of $6.8 million, $3.7 million, and $0.5 million in the U.S. Wholesale, International, and U.S. Retail segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived Skip Hop tradename asset. The charge recorded on our indefinite-lived OshKosh tradename asset included charges of $13.6 million, $1.6 million, and $0.3 million in the U.S. Retail, U.S. Wholesale, International segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived OshKosh tradename asset. The carrying values of the Company's indefinite-lived Skip Hop and OshKosh tradename assets after the impairment charges were $15.0 million and $70.0 million, respectively.

The interim assessments performed indicated that fair values exceeded carrying amounts for our other reporting units and indefinite-lived intangible assets by at least 50%. Although the Company determined that no impairment exists for the Company's other goodwill or indefinite-lived or definite-lived intangible assets, these assets could be at risk for impairment should global economic conditions continue to deteriorate as a result of COVID-19.

Amortization expense for intangible assets subject to amortization was approximately $0.9 million for both first fiscal quarters ended March 28, 2020 and March 30, 2019.

The estimated amortization expense for the next five fiscal years is as follows:



(dollars in thousands)	Amortization expense
2021	$	3,690
2022	$	3,690
2023	$	3,648
2024	$	3,618
2025	$	3,618