Note 10. Segment Financial Information

The Company operates and manages its business by distribution channel and has identified two reportable segments, as further described below. Management considered both similar and dissimilar economic characteristics, internal reporting and management structures, as well as products, customers, and supply chain logistics to identify the following reportable segments:

•

Wholesale segment—consists of the Company’s operations to distribute products to major department stores and specialty stores in the United States and select international markets; and

•

Direct-to-consumer segment—consists of the Company’s operations to distribute products directly to the consumer through its branded full-price specialty retail stores, outlet stores, and e-commerce platform.

The accounting policies of the Company’s reportable segments are consistent with those described in Note 1 to the audited Consolidated Financial Statements of VHC for the fiscal year ended January 28, 2017 included in the 2016 Annual Report on Form 10-K. Unallocated corporate expenses are comprised of selling, general, and administrative expenses attributable to corporate and administrative activities (such as marketing, design, finance, information technology, legal and human resource departments), and other charges that are not directly attributable to the Company’s reportable segments. Unallocated corporate assets are comprised of the carrying values of the Company’s goodwill and tradename, deferred tax assets, and other assets that will be utilized to generate revenue for both of the Company’s reportable segments.

Summary information for the Company’s reportable segments is presented below.

	Three Months Ended						Nine Months Ended
	October 28,			October 29,			October 28,			October 29,
(in thousands)	2017			2016			2017			2016
Net Sales:
Wholesale	$	52,990		$	51,219		$	127,647		$	135,614
Direct-to-consumer		26,077			24,754			70,287			68,706
Total net sales	$	79,067		$	75,973		$	197,934		$	204,320
Income (loss) before income taxes:
Wholesale	$	16,454		$	18,416		$	35,882		$	39,422
Direct-to-consumer		3,000			990			(84	)		2,344
Subtotal		19,454			19,406			35,798			41,766
Unallocated corporate expenses		(14,145	)		(13,343	)		(47,542	)		(43,506	)
Interest expense, net		(1,693	)		(1,023	)		(4,013	)		(2,909	)
Other expense, net		(113	)		(191	)		(116	)		(379	)
Total income (loss) before income taxes	$	3,503		$	4,849		$	(15,873	)	$	(5,028	)

	October 28,		January 28,
(in thousands)	2017		2017
Total Assets:
Wholesale	$	70,451	$	44,442
Direct-to-consumer		47,860		45,038
Unallocated corporate		134,412		150,000
Total assets	$	252,723	$	239,480