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Acquisitions and Goodwill | 12 Months Ended
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Jan. 02, 2016
Business Combinations [Abstract] |
Acquisitions and Goodwill | Acquisitions and Goodwill Skagen Designs, Ltd. Acquisition. On April 2, 2012, the Company acquired Skagen Designs, Ltd. and certain of its international affiliates ("Skagen Designs"). The purchase price was $231.7 million in cash and 150,000 shares of the Company's common stock valued at $19.9 million. In addition, subject to the purchase agreement, the sellers could receive up to 100,000 additional shares of the Company's common stock if the Company's net sales of SKAGEN® branded products exceed certain thresholds over a defined period of time (the "Earnout"). The Company recorded the Earnout as a $9.9 million contingent consideration liability in accrued expenses—other in the Company's consolidated balance sheets as of the acquisition date. The Earnout criteria was not met and the contingent consideration liability was remeasured to zero in the fourth quarter of fiscal year 2012. During the fourth quarter of fiscal year 2014, the Company participated in arbitration proceedings regarding the original purchase price for Skagen Designs, which concluded that the original purchase amount for Skagen Designs was overstated and awarded the Company approximately $6.0 million. The Company recognized the amount in other income (expense) - net in the Company's consolidated statements of income and comprehensive income for the fiscal year 2014. Fossil Spain Acquisition. On August 10, 2012, the Company’s joint venture company, Fossil, S.L. (“Fossil Spain”), entered into a Framework Agreement (the “Framework Agreement”) with several related and unrelated parties, including General De Relojeria, S.A. (“General De Relojeria”), the Company’s joint venture partner. Pursuant to the Framework Agreement, Fossil Spain was granted the right to acquire the outstanding 50% of its shares owned by General De Relojeria upon the expiration of the joint venture agreement on December 31, 2015. The Company plans to complete the acquisition of these shares in the first quarter of fiscal year 2016 at which time Fossil Spain will become a wholly-owned subsidiary of the Company. As of January 1, 2013, pursuant to the Framework Agreement, the Company assumed control over the board of directors and the day-to-day management of Fossil Spain, and began consolidating Fossil Spain, instead of treating it as an equity method investment. The purchase price for the shares has a fixed and variable component which will be settled in fiscal year 2016. The fixed portion was based on 50% of the net book value of Fossil Spain as of December 31, 2012. The present value of the remaining fixed portion was measured at 4.2 million euros (approximately $4.6 million) as of January 2, 2016. The present value of the remaining variable component was based on Fossil Spain’s earnings for fiscal year 2015 and was measured at 3.4 million euros (approximately $3.6 million) as of January 2, 2016. Both the fixed and variable component of the remaining consideration were recorded in accrued expenses-other, in the consolidated balance sheets at January 2, 2016. See Note 9—Fair Value Measurements for additional information about the contingent consideration liability for Fossil Spain. Fossil Accessories South Africa Acquisition. On February 1, 2015, the Company closed a share purchase agreement with S. Keren Watch Group (“SKWG”), pursuant to which the Company acquired 51% ownership in the Cape Town, South Africa-based distributor for approximately $4.8 million in cash, net of cash acquired and including working capital adjustments (the “SKWG Acquisition”). SKWG had been a distribution partner for the Company for over 23 years, representing all Fossil brands and most of the Company’s licensed brands in South Africa. Upon closing of the share purchase, SKWG was renamed Fossil Accessories South Africa Pty, Ltd. The Company recorded $4.5 million of goodwill related to the acquisition. Misfit, Inc. Acquisition. On December 22, 2015, the Company acquired Misfit, Inc. ("Misfit"), an innovator and distributor of wearable technology and stylish connected devices. Misfit was a U.S.-based, privately held company. The primary purpose of the acquisition was to acquire a scalable technology platform that can be integrated across the Company's multi-brand portfolio, a native wearable technology brand and a pipeline of innovative products. Misfit’s position in the wearable technology space combined with their software and hardware engineering teams enables the Company to expand its addressable market with new distribution channels, products, brands and enterprise partnerships. The purchase price was $215.4 million in cash, net of cash acquired and $1.7 million in replacement awards attributable to precombination service. To fund the cash purchase price, the Company utilized cash on hand and approximately $60 million of availability under its $1.05 billion revolving line of credit. The results of Misfit's operations have been included in the Company’s consolidated financial statements since December 22, 2015, but did not have a material impact on the Company’s consolidated statements of income and comprehensive income. The Company incurred approximately $8.4 million of acquisition-related expenses for legal, accounting, finance and valuation services during the fourth quarter of fiscal year 2015. Acquisition costs are reflected in general and administrative expenses on the Company’s consolidated statements of comprehensive income. Assets acquired and liabilities assumed in the transaction were recorded at their acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred. Because the total purchase price exceeded the fair values of the tangible and intangible assets acquired, goodwill was recorded equal to the difference. The element of goodwill that is not separable into identifiable intangible assets represents expected synergies. The following table summarizes the allocation of the purchase price to the preliminary estimated fair value of the assets acquired and the liabilities assumed as of December 22, 2015, the effective date of the acquisition (in thousands):
Cash paid, net of cash acquired |  | $ | 215,370 |
Replacement awards attributable to precombination service |  | 1,709 |
Total transaction consideration |  | $ | 217,079 |
Accounts receivable |  | $ | 1,208 |
Inventories |  | 12,900 |
Prepaid expenses and other current assets |  | 25 |
Property, plant and equipment and other long-term assets |  | 1,190 |
Goodwill |  | 164,405 |
Amortizing Intangibles: | Useful Lives |
Trade name | 6 yrs. | 15,700 |
Customer lists | 5 yrs. | 10,800 |
Developed technology | 7 yrs. | 36,100 |
Noncompete agreements | 3 yrs. | 700 |
Current liabilities |  | (12,964 | )
Long-term liabilities |  | (12,985 | )
Total net assets acquired |  | $ | 217,079 |
The amounts shown above may change in the near term as management continues to assess the fair value of acquired assets and liabilities. A change in this valuation may also impact the income tax related accounts and goodwill. The goodwill recognized from the acquisition has an indefinite useful life and will be included in the Company’s annual impairment testing. Goodwill. The changes in the carrying amount of goodwill were as follows (in thousands):
| Americas |  | Europe |  | Asia |  | Total
Balance at December 28, 2013 | $ | 119,655 |  |  | $ | 75,367 |  |  | $ | 11,932 |  |  | $ | 206,954 |
Foreign currency changes | (217 | ) |  | (8,934 | ) |  | (75 | ) |  | (9,226 | )
Balance at January 3, 2015 | $ | 119,438 |  |  | $ | 66,433 |  |  | $ | 11,857 |  |  | $ | 197,728 |
Acquisitions (1) | 164,405 |  |  | 4,487 |  |  | — |  |  | 168,892 |
Foreign currency changes | (245 | ) |  | (6,939 | ) |  | (42 | ) |  | (7,226 | )
Balance at January 2, 2016 | $ | 283,598 |  |  | $ | 63,981 |  |  | $ | 11,815 |  |  | $ | 359,394 |
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(1) | The Company is still gathering information in order to allocate the goodwill across reporting segments.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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