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Related Party Transactions
6 Months Ended
Jul. 29, 2017
Related Party Transactions [Abstract]  
Related Party Transactions
RELATED PARTY TRANSACTIONS

Accounts receivable, accounts payable, and prepaid expenses associated with related parties are separately presented on the consolidated balance sheets. Accounts receivable from and payables to related parties normally settle in the form of cash in 30 to 60 days.

Schottenstein Affiliates

As of July 29, 2017, the Schottenstein Affiliates, entities owned or controlled by Jay L. Schottenstein, the executive chairman of our Board of Directors, and members of his family, beneficially owned approximately 19% of the Company's outstanding Common Shares, representing approximately 51% of the combined voting power. As of July 29, 2017, the Schottenstein Affiliates beneficially owned 7.3 million Class A Common Shares and 7.7 million Class B Common Shares.

Leases with Related Parties- We lease our fulfillment center and certain store locations owned by Schottenstein Affiliates. During the three months ended July 29, 2017 and July 30, 2016, we recorded rent expense from leases with Schottenstein Affiliates of $2.3 million and $2.0 million, respectively. During the six months ended July 29, 2017 and July 30, 2016, we recorded rent expense from leases with Schottenstein Affiliates of $4.6 million and $4.1 million, respectively.

Basis Difference Related to Acquisition of Commonly Controlled Entity- The basis difference related to acquisition of commonly controlled entity balance, as shown on our consolidated balance sheets, relates to a legal entity acquisition in fiscal 2012 from certain Schottenstein Affiliates. The legal entity owned property that was previously leased by us. As this was a transaction between entities under common control, there was no adjustment to the historical cost carrying amounts of assets transferred to the Company. The difference between the historical cost carrying amounts and the consideration transferred was reflected as an equity transaction.

Other Purchases and Services- During the three months ended July 29, 2017 and July 30, 2016, we had other purchases and services from Schottenstein Affiliates of $0.4 million and $0.3 million, respectively. During the six months ended July 29, 2017 and July 30, 2016, we had other purchases and services from Schottenstein Affiliates of $0.7 million and $0.6 million, respectively.

Town Shoes

Our ownership percentage in Town Shoes is 46.3%, which provides us a 50% voting control and board representation equal to the co-investor, and is treated as an equity investment.

Management Agreement- We have a management agreement with Town Shoes under which we provide certain information technology and management services. During the three and six months ended July 29, 2017, we recognized income of $0.3 million and $0.6 million, respectively. During the three and six months ended July 30, 2016, no services were provided.

License Agreement- We license the use of our tradename and trademark, DSW Designer Shoe Warehouse, to Town Shoes for a royalty fee based on a percentage of net sales from its Canadian DSW stores, which are included in net sales. The license is exclusive and non-transferable for use in Canada. During the three months ended July 29, 2017 and July 30, 2016, we recognized royalty income of $0.2 million and $0.1 million, respectively. During the six months ended July 29, 2017 and July 30, 2016, we recognized royalty income of $0.3 million and $0.2 million, respectively.

Other Purchases and Services- During the three and six months ended July 29, 2017, Town had other purchases and services from us of $0.7 million and $1.6 million, respectively. During the three and six months ended July 30, 2016, no other purchases and services were provided.

David Duong, CEO of Ebuys

On March 4, 2016, we acquired 100% ownership of Ebuys from its co-founders, including David Duong, who continues to serve on the board of directors of Ebuys, for cash and future amounts to be paid to the co-founders contingent upon achievement of certain milestones. See Note 13, Commitments and Contingencies, for the estimated fair value of the contingent consideration liability and changes recognized. Mr. Duong will receive 50% of any future payments of the contingent consideration.