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BUSINESS SEGMENT INFORMATION
 12 Months Ended
Jan. 30, 2021
BUSINESS SEGMENT INFORMATION  
BUSINESS SEGMENT INFORMATION

8.   BUSINESS SEGMENT INFORMATION

​

The Company’s reportable segments are Famous Footwear and Brand Portfolio. The Famous Footwear segment is comprised of Famous Footwear, famousfootwear.com and famousfootwear.ca. Famous Footwear operated 916 stores at the end of 2020, primarily selling branded footwear for the entire family.

The Brand Portfolio segment is comprised of wholesale operations selling the Company’s branded footwear, and the retail stores and e-commerce sites associated with those brands. This segment sources and markets licensed, branded and private-label footwear primarily to online retailers, national chains, department stores, mass merchandisers and independent retailers as well as Company-owned Famous Footwear, Allen Edmonds, Naturalizer and Sam Edelman stores and e-commerce businesses. The Brand Portfolio segment included 107 branded retail stores in the United States, 50 branded retail stores in Canada, and 13 branded retail stores in China at the end of 2020.

The Company’s Famous Footwear and Brand Portfolio reportable segments are operating units that are managed separately.  These reportable segments reflect the level at which the Company’s chief operating decision maker evaluates financial performance and allocates resources.  Operating (loss) earnings for the reportable segments represents gross profit, less selling and administrative expenses, impairment of goodwill and intangible assets and restructuring and other special charges, net. The accounting policies of the reportable segments are the same as those described in Note 1 to the consolidated financial statements. Intersegment sales are generally recorded at a profit, and intersegment earnings related to inventory on hand at the purchasing segment are eliminated against the earnings.  

Corporate assets, administrative expenses and other costs and recoveries that are not allocated to the operating units, as well as the elimination of intersegment sales and profit, are reported in the Eliminations and Other category.

Following is a summary of certain key financial measures for the respective periods:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Famous

​

Brand

​

Eliminations

​

​

​

($ thousands)

    

Footwear

    

Portfolio

    

and Other

    

Total

Fiscal 2020

​

  

​

​

  

​

​

  

​

​

  

​

Net sales

​

$

1,263,551

​

$

902,481

​

$

(48,962)

​

$

2,117,070

Intersegment sales

​

 

—

​

 

48,962

​

 

—

​

 

48,962

Depreciation and amortization

​

 

23,090

​

 

28,889

​

 

8,560

​

 

60,539

Operating loss

​

 

(23,821)

​

 

(408,444)

​

 

(53,393)

​

 

(485,658)

Segment assets

​

 

765,754

​

 

851,027

​

 

250,269

​

 

1,867,050

Purchases of property and equipment

​

 

7,693

​

 

6,486

​

 

2,607

​

 

16,786

Capitalized software

​

 

870

​

 

153

​

 

4,251

​

 

5,274

​

​

 

  

​

 

  

​

 

  

​

 

  

Fiscal 2019

​

 

  

​

 

  

​

 

  

​

 

  

Net sales

​

$

1,588,057

​

$

1,406,460

​

$

(72,955)

​

$

2,921,562

Intersegment sales

​

 

—

​

 

72,955

​

 

—

​

 

72,955

Depreciation and amortization

​

 

26,706

​

 

29,875

​

 

8,981

​

 

65,562

Operating earnings (loss)

​

 

76,896

​

 

58,153

​

 

(31,236)

​

 

103,813

Segment assets

​

 

891,042

​

 

1,383,500

​

 

157,165

​

 

2,431,707

Purchases of property and equipment

​

 

16,129

​

 

21,973

​

 

6,431

​

 

44,533

Capitalized software

​

 

16

​

 

1,544

​

 

4,059

​

 

5,619

​

​

 

  

​

 

  

​

 

  

​

 

  

Fiscal 2018

​

 

  

​

 

  

​

 

  

​

 

  

Net sales

​

$

1,606,808

​

$

1,313,551

​

$

(85,513)

​

$

2,834,846

Intersegment sales

​

 

—

​

 

85,513

​

 

—

​

 

85,513

Depreciation and amortization

​

 

28,816

​

 

20,768

​

 

13,113

​

 

62,697

Operating earnings (loss)

​

 

85,268

​

 

(40,799)

​

 

(44,068)

​

 

401

Segment assets

​

 

502,507

​

 

1,211,008

​

 

125,053

​

 

1,838,568

Purchases of property and equipment

​

 

17,552

​

 

41,993

​

 

2,938

​

 

62,483

Capitalized software

​

 

351

​

 

814

​

 

3,251

​

 

4,416

​

Products purchased for the Famous Footwear segment from three key third-party suppliers (Nike, Skechers and adidas) represented approximately 25%, 22% and 24% of consolidated net sales for 2020, 2019 and 2018, respectively.  

​

Following is a reconciliation of operating (loss) earnings to (loss) earnings before income taxes:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

($ thousands)

2020

    

2019

    

2018

Operating (loss) earnings

$

(485,658)

​

$

103,813

​

$

401

Interest expense, net

 

(48,287)

​

 

(33,123)

​

 

(18,277)

Loss on early extinguishment of debt

 

—

​

 

—

​

 

(186)

Other income, net

 

16,834

​

 

7,903

​

 

12,308

(Loss) earnings before income taxes

$

(517,111)

​

$

78,593

​

$

(5,754)

​

For geographic purposes, the domestic operations include the Company’s domestic retail operations, the wholesale distribution of licensed, branded and private-label footwear to a variety of retail customers, including the Famous Footwear and Brand Portfolio stores, as well as the Company’s e-commerce businesses.

The Company’s international operations consist of wholesale and retail operations primarily in Eastern Asia, Canada and Europe. The Eastern Asia operations primarily include first-cost transactions, where footwear is sold at international ports to customers who then import the footwear into the United States and other countries.

A summary of the Company’s net sales and long-lived assets, including lease right-of-use assets and property and equipment, by geographic area were as follows:

​

​

​

​

​

​

​

​

​

​

​

($ thousands)

    

2020

    

2019

    

2018

Net Sales

 

​

  

 

​

  

 

​

  

United States

​

$

1,984,713

​

$

2,734,912

​

$

2,656,928

Eastern Asia

​

 

77,793

​

 

98,045

​

 

93,883

Canada

​

 

46,781

​

 

80,247

​

 

63,354

Other

​

 

7,783

​

 

8,358

​

 

20,681

Total net sales

​

$

2,117,070

​

$

2,921,562

​

$

2,834,846

​

​

 

  

​

 

  

​

 

  

Long-Lived Assets (1)

​

 

  

​

 

  

​

 

  

United States

​

$

703,642

​

$

881,338

​

$

219,975

Canada

​

 

20,246

​

 

35,317

​

 

9,381

Eastern Asia

​

 

2,660

​

 

3,527

​

 

1,348

Other

​

 

192

​

 

258

​

 

80

Total long-lived assets

​

$

726,740

​

$

920,440

​

$

230,784

(1)Long-lived assets include $554,303 and $695,594 of lease right-of-use assets in 2020 and 2019, respectively, with no corresponding amounts in 2018, as it precedes the adoption of ASC 842.