Fair Value Measurements

12 Months Ended

Jan. 31, 2019

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract]

NOTE 8 - FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:

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Level 1 - Quoted prices in active markets for identical assets or liabilities.

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Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

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Level 3 - Unobservable inputs based on the Company’s assumptions.

The guidance requires the use of observable market data if such data is available without undue cost and effort.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of January 31, 2019 and 2018 (in thousands):

		Fair Value at January 31, 2019
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	177	$	—	$	—	$	177
Short-term investment	Other current assets		155		—		—		155
SERP assets - employer	Other non-current assets		860		—		—		860
SERP assets - employee	Other non-current assets		38,170		—		—		38,170
Hedge derivatives	Other current assets		—		22		—		22
Total		$	39,362	$	22	$	—	$	39,384
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	38,170	$	—	$	—	$	38,170
Hedge derivatives	Accrued liabilities		—		156		—		156
Contingent purchase price liability	Other non-current liabilities		—		—		16,718		16,718
Total		$	38,170	$	156	$	16,718	$	55,044

		Fair Value at January 31, 2018
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	275	$	—	$	—	$	275
Short-term investment	Other current assets		164		—		—		164
SERP assets - employer	Other non-current assets		994		—		—		994
SERP assets - employee	Other non-current assets		38,577		—		—		38,577
Hedge derivatives	Other current assets		—		544		—		544
Total		$	40,010	$	544	$	—	$	40,554
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	38,577	$	—	$	—	$	38,577
Hedge derivatives	Accrued liabilities		—		46		—		46
Total		$	38,577	$	46	$	—	$	38,623

The fair values of the Company’s available-for-sale securities are based on quoted prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives are entered into by the Company principally to reduce its exposure to Swiss franc, British pound and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates. The carrying amount of debt approximated fair value as of January 31, 2019 and 2018 due to the availability and floating rate for similar instruments. During fiscal 2017, the Company determined that an investment in a privately held company experienced an other than temporary impairment and recorded a charge of $1.3 million, in other expenses in the Company’s Consolidated Statements of Operations, to reduce the carrying value to zero in the United States location of the Watches and Accessory Brands segment.

The fair value of the Level 3 contingent purchase price liability related to the acquisition of MVMT Watches, Inc., owner of MVMT, a global aspirational lifestyle brand, is measured using a Monte Carlo simulation with key assumptions that include revenue and brand EBITDA, (as defined in the acquisition agreement) of the acquired business during the earn-out period, volatilities, estimated discount rates, risk-free rate, and correlation. The liability is revalued each reporting period after the acquisition and increases or decreases in the fair value of the liability are recorded in the Consolidated Statements of Operations. Changes in fair value can result from the estimated achievement of the revenue and brand EBITDA performance hurdles, and movements in discount rates, volatilities, and the other key assumptions. The inputs and assumptions are not observable in the market but reflect the assumptions we believe would be made by a market participant.

The following table presents the change in the Level 3 contingent purchase price liability during the twelve months ended January 31, 2019:

	Fiscal Year Ended January 31,
(In thousands)	2019
Beginning balance	$	—
Acquisition of MVMT		16,500
Payments		—
Adjustments included in earnings		218
Ending balance	$	16,718

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

See Note 15 for a discussion of the fair value of the assets held in the Company’s defined benefit plan in Switzerland.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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