GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 26, 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	—		—		1,134			1,134
Balance at September 28, 2019	$	83,934	$	74,454	$	69,847		$	228,235

Balance at December 28, 2019	$	83,934	$	74,454	$	70,638		$	229,026
Goodwill impairment^(*)	—		—		(17,742		)	(17,742		)
Foreign currency impact	—		—		(1,777		)	(1,777		)
Balance at September 26, 2020	$	83,934	$	74,454	$	51,119		$	209,507


(*)	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:



		September 26, 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		1,189		2,722		3,911		1,002		2,909
Total tradenames, net		$	309,144	$	1,189	$	307,955	$	335,644	$	1,002	$	334,642

Skip Hop customer relationships	15 years	$	47,300	$	11,039	$	36,261	$	47,300	$	8,657	$	38,643
Carter's Mexico customer relationships	10 years	2,875		989		1,886		3,258		775		2,483
Total customer relationships, net		$	50,175	$	12,028	$	38,147	$	50,558	$	9,432	$	41,126



		September 28, 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⁽³⁾	Indefinite	26,000		—		26,000
Finite-life tradenames	5-20 years	3,911		939		2,972
Total tradenames, net		$	335,644	$	939	$	334,705

Skip Hop customer relationships	15 years	$	47,300	$	7,863	$	39,437
Carter's Mexico customer relationships	10 years	3,148		695		2,453
Total customer relationships, net		$	50,448	$	8,558	$	41,890


(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.


(3)	In the third quarter of fiscal 2019, a charge of $19.1 million, $10.5 million, and $1.2 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.

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 COVID-19, the Company concluded that impairment indicators existed for the first quarter of fiscal 2020. As a result, during the first quarter of fiscal 2020, the Company conducted interim quantitative impairment assessments of 1) 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 2) on the value of the Company's indefinite-lived OshKosh and Skip Hop tradename assets that was recorded in connection with the acquisition of OshKosh B'Gosh Inc. in July 2005 and Skip Hop Holdings, Inc. in February 2017, 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 during the first quarter of fiscal 2020. 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, respectively. The carrying value of the Company's goodwill for the Other International reporting unit after the impairment charge and as of September 26, 2020 was approximately $11.5 million.

The OshKosh and Skip Hop 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 $15.5 million and $11.0 million were recorded during the first quarter of fiscal 2020 on our indefinite-lived OshKosh and Skip Hop tradename assets, respectively. 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, and International segments, respectively, to reflect the impairment of the value ascribed to the indefinite-lived OshKosh tradename asset. 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 carrying values of the Company's indefinite-lived OshKosh and Skip Hop tradename assets after the impairment charges and as of September 26, 2020 were $70.0 million and $15.0 million, respectively.

There were no impairments of goodwill or indefinite-lived or definite-lived intangible assets during the third quarter of fiscal 2020. Although the Company determined that no further impairment exists for the Company's 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 third fiscal quarters ended September 26, 2020 and September 28, 2019. Amortization expense was approximately $2.8 million for each of the first three quarters of fiscal 2020 and for the first three quarters of fiscal 2019.

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



(dollars in thousands)	Amortization expense
2021	$	3,702
2022	$	3,702
2023	$	3,660
2024	$	3,630
2025	$	3,630