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Intangible Assets
 9 Months Ended
Oct. 27, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets Disclosure [Text Block]

8.         Intangible Assets

 

Our intangible assets with indefinite lives consist of: goodwill related to the Shenandoah, Sunset West and BOBO Intriguing Objects acquisitions; and trademarks and tradenames related to the acquisitions of Bradington-Young, Home Meridian and BOBO Intriguing Objects. Our intangible assets with definite lives are recorded in our Home Meridian and Domestic Upholstery segments. Details of our intangible assets are as follows:

 

   

October 27, 2024

    

January 28, 2024

  
   

Gross carrying

amount

    

Impairment / Accumulated

Amortization

    

Gross carrying

amount

    

Impairment / Accumulated

Amortization

  

Intangible assets with indefinite lives:

                                

Goodwill

                                

Domestic Upholstery - Shenandoah *

     490       -       490       -  

Domestic Upholstery - Sunset West

     14,462       -       14,462       -  

All Other - BOBO Intriguing Objects

     84       -       84       -  

Goodwill

     15,036       -       15,036       -  
                                 

Trademarks and Trade names *

     8,011       (1,953 )     8,011       -  
                                 

Intangible assets with definite lives:

                                

Customer Relations

     38,001       (21,507 )     38,001       (18,982 )

Trademarks and Trade names

     2,334       (982 )     2,334       (741 )
                                 

Intangible assets, net

     48,346       (24,442 )     48,346       (19,723 )

 

*The amounts are net of impairment charges of $16.4 million related to Shenandoah goodwill and $4.8 million related to certain Home Meridian segment trade names, which were recorded in fiscal 2021. During the third quarter of fiscal 2025, we reviewed triggering events under ASU 2021-03, Intangibles – Goodwill and Other (Topic 350). Due to the decline in revenue driven by the downturn in the furniture industry, increased freight costs, changes in management and strategy, and the bankruptcy of a key customer, we identified triggering events that necessitated a valuation of the indefinite-lived trade names and trademarks in the Home Meridian segment. Consequently, we performed a valuation using the discounted cash flow method. This methodology involved cash flow projections and growth rates for each trade name over the next five years, provided by management, along with a royalty rate benchmark for companies engaged in similar activities. Based on this analysis, we recorded non-cash impairment charges of $2.0 million for certain indefinite-lived trade names within the Home Meridian segment.

 

Amortization expenses for intangible assets with definite lives were $916,000 and $924,000 for the third quarters of fiscal 2025 and 2024, respectively. Amortization expenses for intangible assets with definite lives were $2.8 million and $2.7 million for the nine-month periods of fiscal 2025 and 2024, respectively. For the remainder of fiscal 2025, amortization expense is expected to be approximately $921,000.