XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.21.2

Goodwill and Intangible Assets | 6 Months Ended
--- | ---
Jul. 31, 2021
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | NOTE 6 – GOODWILL AND INTANGIBLE ASSETS The Company performs its annual impairment assessment of goodwill as well as brand intangibles at the beginning of the fourth quarter of each fiscal year or if an event occurs that would more likely than not reduce the fair value below its carrying amount. During the three months ended April 30, 2020, in light of the COVID-19 pandemic that resulted in the closing of the Company’s stores and of the vast majority of the stores of the Company’s wholesale customers (resulting in a decrease in revenues and gross margin), a decrease in customer spending and decline in the Company’s market capitalization, the Company concluded that a triggering event had occurred during the first quarter of fiscal 2021, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Olivia Burton, MVMT and Company Stores’ long-lived assets as well as the Watch and Accessory Brands reporting unit. The Company performed recoverability tests for the long-lived assets of MVMT, Olivia Burton and the Company Stores as of April 30, 2020. The Company concluded that the carrying amounts of the long-lived assets of Olivia Burton and the Company Stores were recoverable, while the long-lived assets of MVMT may not be recoverable. Utilizing a royalty rate to determine discounted projected future cash flows in the valuation of MVMT’s trade name and a discounted cash flow method for the valuation of MVMT’s customer relationships, the Company concluded that the fair values of MVMT’s tradenames and customer relationships did not exceed their carrying values. As a result, the Company recorded impairment charges in the Watch and Accessory Brands segment totaling $22.2 million in the first quarter of fiscal 2021, decreasing MVMT’s trade name to $2.4 million and MVMT’s customer relationships to zero. After adjusting the carrying value of MVMT’s intangible assets, the Company completed an interim quantitative impairment test of goodwill as of April 30, 2020 in which the Company compared the fair value of the Watch and Accessory Brands reporting unit to its respective carrying value. An impairment test of goodwill was not performed for the Company Stores reporting unit as there was no goodwill at this reporting unit. The fair value estimate for the Watches and Accessory reporting unit was based on the income and market approaches. The discounted cash flow method under the income approach involves estimating the cash flows in a discrete forecast period and a terminal value based on the Gordon Growth Model and discounting at a rate of return that reflects the relative risk of the cash flows. The market approach involves applying valuation multiples to the operating performance of the Watch and Accessory Brands reporting unit derived from comparable publicly traded companies based on the relative historical and projected operations of the reporting unit. The key estimates and assumptions used in the discounted cash flows model included the Company’s discount rate, revenue growth rates, EBIT margins and long-term growth rate. The Company’s assumptions were based on the actual historical performance of the reporting units and took into account the recent severe and continued weakening of operating results as well as the anticipated rate of recovery, and implied risk premiums based on market prices of the Company’s common stock as of the assessment date. The significant estimates in the market approach model included identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples in estimating the fair value of the reporting unit. The excess of the Watch and Accessory Brands unit’s carrying value over the estimate of the fair value was recorded in the Watch and Accessory Brands segment as the goodwill impairment charge in the first quarter of 2021, totaling $133.7 million which resulted in zero goodwill remaining. There were no triggering events during the first six months of fiscal 2022. The changes in the carrying amount of other intangible assets during the six months ended July 31, 2021 are as follows (in thousands):
|  | Trade names |  |  | Customer relationships |  |  | Other (1) |  |  | Total |
Weighted Average Amortization Period (in years) |  | 10 |  |  | 6 |  |  | 10 |  |  |  |
Balance at January 31, 2021 |  | $ | 10,860 |  |  | $ | 5,168 |  |  | $ | 1,053 |  |  | $ | 17,081 |
Additions |  |  | — |  |  |  | — |  |  |  | 133 |  |  |  | 133 |
Amortization |  |  | (824 | ) |  |  | (854 | ) |  |  | (128 | ) |  |  | (1,806 | )
Foreign exchange impact |  |  | 132 |  |  |  | 18 |  |  |  | (8 | ) |  |  | 142 |
Balance at July 31, 2021 |  | $ | 10,168 |  |  | $ | 4,332 |  |  | $ | 1,050 |  |  | $ | 15,550 |
(1) Other includes fees paid related to trademarks. Amortization expense for intangible assets was $0.9 million and $0.8 million for the three months ended July 31, 2021 and 2020, respectively, and $1.8 million and $2.1 million for the six months ended July 31, 2021 and 2020, respectively.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration