Property and Equipment

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Property And Equipment

PROPERTY AND EQUIPMENT

Property and equipment, net consists of the following:

	December 31,
	2016			2015
	(in thousands)
Machinery and equipment	$	33,163		$	36,864
Leasehold improvements	73,363			81,593
Furniture, fixtures and other	19,358			23,576
Other (1)	—			1,595
Construction-in-progress	6,809			3,512
Property and equipment	132,693			147,140
Less: Accumulated depreciation	(88,603		)	(97,650		)
Property and equipment, net	$	44,090		$	49,490

____________________________________________________________________________

⁽¹⁾  Represents the South Africa disposal group, sold in April 2016.

During the years ended December 31, 2016, 2015, and 2014, depreciation expense was $15.1 million, $16.3 million, and $23.2 million, respectively, of which $1.8 million, $1.8 million, and $1.7 million, respectively, was recorded in 'Cost of sales', with the remaining amounts recorded in 'Selling, general and administrative expenses' in the consolidated statements of operations.

The Company recognized a loss on disposals of property and equipment of $0.5 million, $1.4 million and $0.0 million for the year ended December 31, 2016, 2015, and 2014, which is included in 'Selling, general and administrative expenses' in the consolidated statement of operations.

The Company is contractually obligated to restore certain retail and office facilities back to their original condition as specified in the related lease agreements. The estimated fair value of these liabilities is recorded at lease inception along with a related asset at inception of the leases. At December 31, 2016 and 2015 liabilities for asset retirement obligations were $2.8 million and $2.0 million, respectively. Asset retirement obligations are reported in "Other liabilities' in the consolidated balance sheets.

Asset Impairments

During the years ended December 31, 2016, 2015, and 2014, the Company recorded impairments of $2.7 million, $9.6 million, and $8.8 million, respectively, for underperforming retail stores. During the year ended December 31, 2015, additional impairment of $5.7 million related to the South Africa disposal group was recorded. Long-lived asset impairments by reportable operating segment, were:

	Year Ended December 31,
	2016			2015			2014
	Asset Impairment		Number of Stores	Asset Impairment		Number of Stores	Asset Impairment		Number of Stores
	(in thousands, except store count data)
Americas	$	1,703	12	$	7,237	27	$	4,001	36
Asia Pacific (1)	672		21	6,450		36	2,807		14
Europe	338		9	1,584		21	2,019		27
Total	$	2,713	42	$	15,271	84	$	8,827	77

_______________________________________________________________________________

⁽¹⁾     In 2015, the Company recorded impairment of nine retail stores in South Africa of $5.7 million.