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Discontinued Operations
 9 Months Ended
Oct. 02, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure Discontinued Operations
In the first quarter of 2021, the Company announced that as part of its strategic plan, it was exploring alternatives for its European Innerwear business and subsequently reached the decision to exit this business. The Company determined that its European Innerwear business met held-for-sale and discontinued operations accounting criteria at the end of the first quarter of 2021. Accordingly, the Company began to separately report the results of its European Innerwear business as discontinued operations in its Condensed Consolidated Statements of Income, and to present the related assets and liabilities as held for sale in the Condensed Consolidated Balance Sheets. These changes have been applied to all periods presented. On November 4, 2021, the Company announced that it has reached an agreement to sell its European Innerwear business to an affiliate of Regent, L.P., pending the completion of consultation with the European and French works councils representing employees of the European Innerwear business and customary closing conditions. Under the agreement, the purchaser will receive all the assets and operating liabilities of the European Innerwear business. The transaction is expected to close in the first quarter of 2022.
The operations of the European Innerwear business were previously reported primarily in the International segment. Certain expenses related to its operations were included in general corporate expenses, restructuring and other action-related charges and amortization of intangibles which were previously excluded from segment operating profit and have been reclassified to discontinued operations for all periods presented. Discontinued operations does not include any allocation of corporate overhead expense or interest expense.
Upon meeting the criteria for held for sale classification which qualified as a triggering event, the Company performed a full impairment analysis of the disposal group's indefinite-lived intangible assets and goodwill. As a result of the strategic decision to exit the European Innerwear business, forecasts were revised to include updated market conditions and the removal of strategic operating decisions that would no longer occur under the Company's ownership. The revised forecasts indicated impairment charges of certain indefinite-lived trademarks and license agreements as well as the full goodwill balance attributable to the European Innerwear business. As a result of this impairment analysis, a non-cash charge of $155,745 was recorded as "Impairment of intangible assets and goodwill" in the summarized discontinued operations financial information for the nine months ended October 2, 2021. In addition, the Company recorded non-cash charges of $30,562 and $266,742 as "Loss on classification of assets held for sale" in the summarized discontinued operations financial information for the quarter and nine months ended October 2, 2021, respectively, to record a valuation allowance against the net assets held for sale to write down the carrying value of the disposal group to the estimated fair value less costs of disposal. The non-cash charge recorded in the quarter ended October 2, 2021 primarily resulted from changes in working capital balances and foreign exchange rates. The Company will continue to assess the valuation allowance in each interim period until the European Innerwear business is sold. Additionally, the Company recorded an impairment charge of $7,302 in continuing operations on an indefinite-lived trademark for the nine months ended October 2, 2021 which is reflected in the “Selling, general and administrative expenses” line in the Condensed Consolidated Statement of Income. This charge relates to the full impairment of an indefinite-lived trademark related to a specific brand within the European Innerwear business that was excluded from the disposal group as it is not being marketed for sale. The Company intends to exit this brand subsequent to the sale of the European Innerwear business.
During the second quarter of 2020, the Company completed a quantitative impairment analysis for certain indefinite-lived intangible assets as a result of the significant impact of the COVID-19 pandemic on their performance. Based on this analysis, the Company recorded impairment charges of $20,319 on certain indefinite-lived trademarks and other intangible assets within the European Innerwear business which are reflected in the “Impairment of intangible assets and goodwill” line in the summarized discontinued operations financial information for the nine months ended September 26, 2020.
The Company expects to continue certain sales from its supply chain to the European Innerwear business on a transitional basis after the sale of the business. Those sales and the related profit are included in continuing operations in the Condensed Consolidated Statements of Income and in “Other” in note “Business Segment Information” in all periods presented and have not been eliminated as intercompany transactions in consolidation. The related receivables from the European Innerwear business have been reclassified to “Trade accounts receivable, net” in the Condensed Consolidated Balance Sheets for all periods presented.
The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the European Innerwear business that will be eliminated from continuing operations. The key components from discontinued operations related to the European Innerwear business are as follows:
Quarters EndedNine Months Ended
October 2,
2021		September 26,
2020		October 2,
2021		September 26,
2020
Net sales$147,529 $125,913 $400,880 $459,175 
Cost of sales75,171 80,671 213,831 239,219 
Gross profit72,358 45,242 187,049 219,956 
Selling, general and administrative expenses64,941 59,758 209,467 188,573 
Impairment of intangible assets and goodwill— — 155,745 20,319 
Loss on classification of assets held for sale30,562 — 266,742 — 
Operating income (loss)(23,145)(14,516)(444,905)11,064 
Other expenses271 411 885 1,197 
Interest expense, net110 368 269 1,774 
Income (loss) from discontinued operations before income tax expense(23,526)(15,295)(446,059)8,093 
Income tax expense (benefit)1,444 (348)(10,236)11,419 
Net loss from discontinued operations, net of tax$(24,970)$(14,947)$(435,823)$(3,326)
Assets and liabilities of discontinued operations classified as held for sale in the Condensed Consolidated Balance Sheets as of October 2, 2021, January 2, 2021 and September 26, 2020 consist of the following:
October 2,
2021
January 2, 2021(1)
September 26, 2020(1)
Cash and cash equivalents$16,816 $8,822 $14,560 
Trade accounts receivable, net88,684 84,632 71,994 
Inventories127,209 123,337 173,701 
Other current assets16,066 17,295 19,076 
Property, net61,898 67,950 68,809 
Right-of-use assets33,680 34,637 38,574 
Trademarks and other identifiable intangibles, net208,108 284,170 270,404 
Goodwill— 96,692 91,664 
Deferred tax assets7,990 5,438 7,862 
Other noncurrent assets4,360 5,614 5,598 
Allowance to adjust assets to estimated fair value, less costs of disposal(260,687)— — 
Total assets of discontinued operations$304,124 $728,587 $762,242 
Accounts payable$69,122 $77,636 $64,492 
Accrued liabilities118,076 133,431 125,812 
Lease liabilities8,544 10,332 12,956 
Notes payable595 784 5,246 
Lease liabilities - noncurrent26,536 28,775 29,770 
Pension and postretirement benefits42,076 46,569 46,647 
Other noncurrent liabilities34,549 37,645 40,020 
Total liabilities of discontinued operations$299,498 $335,172 $324,943 
(1)Amounts at January 2, 2021 and September 26, 2020 have been classified as current and long-term in the Condensed Consolidated Balance Sheets.
The cash flows related to discontinued operations have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows. The following table presents cash flow and non-cash information related to discontinued operations:
Quarters EndedNine Months Ended
October 2,
2021		September 26,
2020		October 2,
2021		September 26,
2020
Depreciation$— $2,803 $2,608 $8,150 
Amortization$— $1,333 $1,460 $3,877 
Capital expenditures$2,085 $724 $6,155 $6,124 
Impairment of intangible assets and goodwill$— $— $155,745 $20,319 
Loss on classification of assets held for sale$30,562 $— $266,742 $— 
Other investing activities$1,501 $1,795 $4,875 $3,626 
Capital expenditures included in accounts payable at end of period$70 $35 $70 $35 
Right-of-use assets obtained in exchange for lease obligations$1,454 $197 $4,591 $398