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Goodwill | 12 Months Ended
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Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill | Goodwill The carrying value of goodwill, as of December 31, 2024 and 2023, was $89.3 million and $94.9 million, respectively. There was no goodwill impairment recorded for the year ended December 31, 2024. However, as of the annual testing date of October 31, 2024, the estimated fair value of the mnml reporting unit exceeded the carrying value by 11.2% and the carrying value of the related goodwill was $30.0 million. The goodwill of acquired companies is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill of acquired companies is generally not deductible for tax purposes. 2023 Impairment In August 2023, due to elevated interest rates and unfavorable demand in Australia, the Company reduced its forecasts and expectations for the Culture Kings and Petal & Pup reporting units. This reduction was identified as a triggering event and a subsequent quantitative test concluded that the carrying value of the Culture Kings and Petal & Pup reporting units exceeded their fair values as of August 31, 2023. As a result, the Company recorded a non-cash goodwill impairment charge of $68.5 million during the third quarter of 2023. As of December 31, 2023, $11.3 million of goodwill related to Petal & Pup remained on the consolidated balance sheet, while the goodwill related to Culture Kings was fully impaired. 2022 Impairment As part of the annual goodwill impairment test conducted in the fourth quarter of 2022, the Company determined that the carrying value of its Culture Kings and Rebdolls reporting units exceeded their fair values and recorded a total non-cash goodwill impairment charge of $173.8 million during the year ended December 31, 2022. The worsening economic trends in the fourth quarter of 2022, including continued inflation and rising interest rates, as well as unfavorable demand due to changing customer preferences towards a mix of online and physical store shopping led the Company to lower its earnings forecasts and expectations for the Culture Kings and Rebdolls reporting units, driving the reduction in their fair values. Goodwill Activity The following table summarizes goodwill activity:
Balance as of December 31, 2022 | $ | 167,731 |
Impairment | (68,524) |
Changes in foreign currency translation | (4,309) |
Balance as of December 31, 2023 | 94,898 |
Changes in foreign currency translation | (5,644) |
Balance as of December 31, 2024 | $ | 89,254 |

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