(

)

Segment Information

The Company’s operations are conducted through

three

operating segments consisting of DTC, commercial and international franchising. The DTC segment includes the operating activities of corporately-managed locations and other retail delivery operations in the U.S., Canada, China, Denmark, Ireland and the U.K., including the Company’s e-commerce sites and temporary stores. The commercial segment includes the Company’s transactions with other businesses, mainly comprised of licensing the Company’s intellectual properties for

third

party use and wholesale activities. The international franchising segment includes the licensing activities of the Company’s franchise agreements with store locations in Europe (outside of the U.K., Ireland and Denmark), Asia, Australia, the Middle East, Africa and Mexico. The operating segments have discrete sources of revenue, different capital structures and different cost structures. These operating segments represent the basis on which the Company’s chief operating decision maker regularly evaluates the business in assessing performance, determining the allocation of resources and the pursuit of future growth opportunities. Accordingly, the Company has determined that each of its operating segments represent a reportable segment. The

three

reportable segments follow the same accounting policies used for the Company’s consolidated financial statements.

For fiscal year

2018

and

2017,

Store asset impairment charges were disclosed as a separate line item within the consolidated statement of operations, including

$4.6

million in the

fourth

quarter of fiscal

2018.

In addition, asset impairment charges of

$0.7

million were recorded in the

fourth

quarter of fiscal

2018

and included within selling, general and administrative expenses. See Note

— Property and Equipment, net for additional information regarding these charges within the DTC segment. Following is a summary of the financial information for the Company’s reporting segments (in thousands):

	Direct-to-					International
	Consumer			Commercial		Franchising		Total
Fifty-two weeks ended February 2, 2019
Net sales to external customers	$	326,304		$	6,560	$	3,721	$	336,585
Income (loss) before income taxes		(20,801	)		2,293		1		(18,507	)
Capital expenditures		11,253			-		-		11,253
Depreciation and amortization		16,013			1		28		16,042
Fifty-two weeks ended December 30, 2017
Net sales to external customers	$	349,408		$	6,007	$	2,451	$	357,866
Income before income taxes		10,436			934		2,443		13,813
Capital expenditures		17,882			-		191		18,073
Depreciation and amortization		16,101			2		62		16,165
Five weeks ended February 3, 2018
Net sales to external customers	$	29,586		$	358	$	279	$	30,223
Income (loss) before income taxes		(1,269	)		95		146		(1,028	)
Capital expenditures		1,270			-		-		1,270
Depreciation and amortization		1,505			-		2		1,507

Total Assets as of:
February 2, 2019	$	159,269		$	7,283	$	5,494	$	172,046
December 30, 2017		188,685			5,949		3,355		197,989

The Company’s reportable segments are primarily determined by the types of products and services that they offer. Each reportable segment

may

operate in many geographic areas. Revenues are recognized in the geographic areas based on the location of the customer or franchisee. The following schedule is a summary of the Company’s sales to external customers and long-lived assets by geographic area (in thousands):

	North
	America (1)		Europe (2)		Other (3)		Total
Fifty-two weeks ended February 2, 2019
Net sales to external customers	$	283,347	$	51,231	$	2,007	$	336,585
Property and equipment, net		60,490		5,860		18		66,368
Fifty-two weeks ended December 30, 2017
Net sales to external customers		293,282		61,901		2,683	$	357,866
Property and equipment, net		68,141		9,578		32		77,751
Five weeks ended February 3, 2018
Net sales to external customers	$	24,575	$	5,471	$	177	$	30,223

For purposes of this table only:

(

)

North America includes the United States, Canada, Puerto Rico and franchise business in Mexico

(

)

Europe includes the U.K., Ireland, Denmark and franchise businesses in Europe

(

)

Other includes franchise businesses outside of North America and Europe and a corporately-managed location in China