Goodwill and Intangible Assets

6 Months Ended

Aug. 01, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

3. Goodwill and Intangible Assets

A summary of significant components of intangible assets is as follows:

	Loyalty Program and Customer Lists			Favorable Lease Commitments			Madewell Trade Name			Key Money			J.Crew Trade Name
Balance at January 31, 2015	$	5,633		$	20,009		$	65,942		$	4,724		$	740,300
Amortization expense		(1,300	)		(1,440	)		(1,025	)		(115	)		—
Impairment losses		—			—			—			—			(190,305	)
Balance at May 2, 2015		4,333			18,569			64,917			4,609			549,995
Amortization expense		(1,300	)		(1,439	)		(1,025	)		(115	)		—
Balance at August 1, 2015	$	3,033		$	17,130		$	63,892		$	4,494		$	549,995
Total accumulated amortization at August 1, 2015	$	(23,977	)	$	(43,880	)	$	(18,108	)	$	(323	)

A summary of goodwill is as follows:

	Goodwill
Balance at January 31, 2015	$	1,124,715
Impairment losses		(340,900	)
Balance at May 2, 2015		783,815
Impairment losses		—
Balance at August 1, 2015	$	783,815

During the first quarter of fiscal 2015, the Company experienced a further significant reduction in the profitability of its J.Crew reporting unit, primarily driven by performance of women’s apparel and accessories, which the Company expects to continue at least through fiscal 2015. As a result of current and expected future operating results, the Company concluded that the carrying value of the J.Crew reporting unit exceeded its fair value and recorded a non-cash goodwill impairment charge of $341 million. There has been no deterioration of the excess of fair value over the carrying value of its Madewell reporting unit. Additionally, the Company recorded a non-cash impairment charge of $190 million to write down the intangible asset related to the J.Crew trade name.

After recording the non-cash goodwill charge of $341 million, the carrying value of goodwill is $676 million in the J.Crew reporting unit and $108 million in the Madewell reporting unit. After recording the non-cash intangible asset charge of $190 million, the carrying value of the J.Crew trade name is $550 million. In fiscal 2014, the Company recorded non-cash impairment charges of $562 million and $145 million to write down goodwill and the intangible asset related to the J.Crew trade name. If operating results continue to decline below the Company’s expectations, additional impairment charges may be recorded in the future.

The impairment losses were the result of the write-down of the following assets:

	For the Twenty-six Weeks Ended August 1, 2015		For the Twenty-six Weeks Ended August 2, 2014
Goodwill allocated to the J.Crew reporting unit	$	340,900	$	—
Intangible asset related to the J.Crew trade name		190,305		—
Long-lived assets (see note 7)		3,204		—
Impairment losses	$	534,409	$	—

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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