COMMITMENTS AND CONTINGENCIES

Rental Commitments and Contingencies

The Company rents space for its retail stores, offices, warehouses, vehicles, and equipment under operating leases expiring at various dates through 2033. Certain leases contain rent escalation clauses. Rent expense for leases with escalations or rent holidays is recognized on a straight-line basis over the lease term beginning on the lease inception date. Certain leases also provide for contingent rents, which are generally determined as a percent of sales in excess of specified levels. A contingent rent liability is recognized together with the corresponding rent expense when specified levels have been achieved or when the Company determines that achieving the specified levels during the period is probable.

Deferred rent is included in the consolidated balance sheets in 'Accrued expenses and other current liabilities'. Future minimum lease payments under operating leases were as follows:




Year ending December 31,	December 31, 2016
	(in thousands)
2017	$	68,241
2018	56,125
2019	42,702
2020	35,692
2021	29,230
Thereafter	78,565
Total minimum lease payments	$	310,555

Minimum sublease rentals of $0.2 million under non-cancelable subleases and contingent rentals, which may be paid under certain retail leases on a basis of percentage of sales in excess of stipulated amounts, are excluded from the commitment schedule.

Rent expense under operating leases was:



	Year Ended December 31,
	2016			2015			2014
	(in thousands)
Minimum rentals	$	88,182		$	96,579		$	108,466
Contingent rentals	14,596			14,929			16,875
Less: Sublease rentals	(187		)	(322		)	(868		)
Total rent expense	$	102,591		$	111,186		$	124,473

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Minimum rentals include all lease payments, fixed and variable common area maintenance, parking and storage fees, which were approximately $10.2 million, $9.1 million, and $9.6 million during the years ended December 31, 2016, 2015, and 2014, respectively.

Purchase Commitments

In December 2011, the Company renewed and amended its supply agreement with Finproject S.p.A. (formerly known as Finproject s.r.l.), which provides the Company the right to purchase certain raw materials used to manufacture its products. The supply agreement requires that the Company meet minimum purchase requirements throughout the term of the agreement, which renews annually on January 1st unless terminated by either party. Historically, the minimum purchase requirements have not been onerous and the Company does not expect them to become onerous in the future. Depending on the material purchased, pricing is based either on contracted price or is subject to quarterly reviews and fluctuates based on order volume, currency fluctuations, and raw material prices. Pursuant to the agreement, the Company guarantees the payment for certain third-party manufacturer purchases of these raw materials up to a maximum potential amount of €3.5 million (approximately $3.7 million as of December 31, 2016).

As of December 31, 2016 and 2015, the Company had firm purchase commitments with other certain third-party manufacturers of $125.9 million and $158.2 million, respectively.

Government Tax Audits

The Company is regularly subject to, and is currently undergoing, audits by tax authorities in the United States and several foreign jurisdictions for prior tax years.

Other

During its normal course of business, the Company may make certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain matters. The Company cannot determine a range of estimated future payments and has not recorded any liability for indemnities, commitments and guarantees in the accompanying consolidated balance sheets.

See Note 17 — Legal Proceedings for further details regarding potential loss contingencies related to government tax audits and other current legal proceedings.