Goodwill and Intangible Assets

12 Months Ended

Jan. 30, 2016

Goodwill is equal to the excess of the purchase price over the fair value of the net assets acquired, and represents benefits from the acquisition that are not attributable to individually identified and separately recognized assets. Those benefits include the expected opportunity to expand into new fashion categories online, and to leverage our existing infrastructure to develop and grow the GoJane business. The goodwill is deductible for tax purposes. All goodwill is related to the GoJane reporting unit, which is included in the retail stores and e-commerce segment.

We evaluate all indefinite-lived intangible assets for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. During the fourth quarter of 2015, we performed the annual impairment test for goodwill and other indefinite-lived intangible assets. As a result of the impairment test, we did not recognize any impairment loss for goodwill or other intangible assets. During fiscal 2014, we recorded $5.1 million of impairment loss for GoJane trademark included in our retail stores and e-commerce segment. The decline in fair value of the trademarks below its book value was primarily the result of lower than expected revenue and gross margin growth relative to the assumptions made in the prior fiscal year. As of January 31, 2015, the carrying value of the trademark was written down to $6.3 million. During fiscal 2013, we did not recognize any impairment loss for goodwill or other intangible assets.

Intangible Assets

Intangible assets consist of the following:



	January 30, 2016
Description	Gross Carrying Amount		Impairment		Accumulated Amortization			Net
	(In thousands)
Intangible assets subject to amortization:
Customer relationships	$	3,400	$	—	$	(1,577	)	$	1,823
E-commerce software platform	800		—		(800		)	—
Total intangible assets subject to amortization	4,200		—		(2,377		)	1,823

Intangible assets not subject to amortization:
Trademarks	6,300		—		—			6,300

Total intangible assets	$	10,500	$	—	$	(2,377	)	$	8,123



	January 31, 2015
Description	Gross Carrying Amount		Impairment			Accumulated Amortization			Net
	(In thousands)
Intangible assets subject to amortization:
Customer relationships	$	3,400	$	—		$	(1,093	)	$	2,307
E-commerce software platform	800		—			(598		)	202
Total intangible assets subject to amortization	4,200		—			(1,691		)	2,509

Intangible assets not subject to amortization:
Trademarks	11,400		(5,100		)	—			6,300

Total intangible assets	$	15,600	$	(5,100	)	$	(1,691	)	$	8,809

Amortization

We recognized amortization expense on intangible assets of $0.7 million in fiscal 2015, $0.8 million in fiscal 2014 and $0.8 million in fiscal 2013. We amortize our finite-lived intangible assets primarily over the following weighted-average periods: customer relationships - seven years and e-commerce software platform - three years. In addition, the weighted-average life of all finite-lived intangibles assets is six years. Based on the amount of intangible assets subject to amortization as of January 30, 2016, the expected amortization for each of the next five fiscal years and thereafter is as follows:



	Amortization Expense
	(In thousands)
Fiscal 2016	$	486
Fiscal 2017	486
Fiscal 2018	486
Fiscal 2019	365
Fiscal 2020	—
Thereafter	—
Total	$	1,823

- 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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