Business Segment Information

12 Months Ended

Feb. 01, 2014

Business Segment Information [Abstract]

Business Segment Information

7. BUSINESS SEGMENT INFORMATION

The Company’s reportable segments include Famous Footwear, Wholesale Operations, Specialty Retail, and Other.

Famous Footwear, which represents the Company’s largest division, operated 1,044 stores at the end of 2013, primarily selling branded footwear for the entire family.

The Wholesale Operations segment sources and markets licensed, branded and private-label footwear primarily to national chains, department stores, independent retailers, mass merchandisers, online retailers, andcatalogs as well as Company-owned Famous Footwear and Specialty Retail segments.

The Specialty Retail segment included 92 stores in the United States and87 stores in Canada at the end of 2013, selling primarily Naturalizer brand footwear in regional malls and outlet centers as well as other e-commerce businesses.

The Other segment includes corporate assets and administrative expenses and other costs and recoveries that are not allocated to the operating units.

The Company’s retail and wholesale reportable segments are operating units that market to different customers and are each managed separately. An operating segment’s performance is evaluated and resources are allocated based on operating earnings (loss). Operating earnings (loss) represent gross profit, less selling and administrative expenses,  restructuring and other special charges, net and impairment of assets held for sale. The accounting policies of the reportable segments are the same as those described in Note 1 to the consolidated financial statements. Intersegment sales are generally recorded at a profit to the selling segment. All intersegment earnings related to inventory on hand at the purchasing segment are eliminated against the earnings of the selling segment.

Following is a summary of certain key financial measures for the respective periods.  External sales, intersegment sales, and operating earnings (loss) exclude discontinued operations.  Segment assets, depreciation and amortization, amortization of debt issuance costs and debt discount, purchases of property and equipment, and capitalized software include both continuing operations and discontinued operations. 

	Famous		Wholesale		Specialty
($ thousands)	Footwear		Operations		Retail			Other		Total
Fiscal 2013
External sales	$	1,527,537	$	763,670	$	221,906	$	–	$	2,513,113
Intersegment sales		2,424		205,469		–		–		207,893
Depreciation and amortization		25,915		10,019		3,423		15,972		55,329
Amortization of debt issuance costs and debt discount		–		–		–		2,513		2,513
Operating earnings (loss)		107,126		43,130		(4,965)		(46,674)		98,617
Segment assets		433,781		434,532		95,138		185,952		1,149,403
Purchases of property and equipment		32,728		2,221		3,805		5,214		43,968
Capitalized software		193		122		–		4,920		5,235
Fiscal 2012
External sales	$	1,514,349	$	724,907	$	238,540	$	–	$	2,477,796
Intersegment sales		2,311		220,207		–		–		222,518
Depreciation and amortization		22,819		13,688		2,991		15,285		54,783
Amortization of debt issuance costs and debt discount		–		–		–		2,561		2,561
Operating earnings (loss)		94,096		30,247		(8,850)		(41,015)		74,478
Segment assets		472,180		509,237		59,475		133,081		1,173,973
Purchases of property and equipment		34,931		8,969		6,716		5,185		55,801
Capitalized software		–		3		–		7,925		7,928
Fiscal 2011
External sales	$	1,456,314	$	722,815	$	255,637	$	–	$	2,434,766
Intersegment sales		2,156		206,258		–		–		208,414
Depreciation and amortization		26,116		15,521		3,517		13,957		59,111
Amortization of debt issuance costs and debt discount		–		–		–		2,338		2,338
Operating earnings (loss)		62,515		11,721		(7,627)		(36,077)		30,532
Segment assets		435,344		595,355		56,151		140,626		1,227,476
Purchases of property and equipment		16,272		5,991		3,901		1,693		27,857
Capitalized software		273		15		–		10,419		10,707

Following is a reconciliation of operating earnings to earnings before income taxes from continuing operations:

($ thousands)	2013		2012		2011
Operating earnings	$	98,617	$	74,478	$	30,532
Interest expense		(21,254)		(22,973)		(25,428)
Loss on early extinguishment of debt		–		–		(1,003)
Interest income		377		322		569
Earnings before income taxes from continuing operations	$	77,740	$	51,827	$	4,670

For geographic purposes, the domestic operations include the wholesale distribution of licensed, branded and private-label footwear to a variety of retail customers, including the Company’s Famous Footwear and Specialty Retail stores and e-commerce business.

The Company’s foreign operations primarily consist of wholesale operations in the Far East and retail operations in Canada and Guam. The Far East operations include first-cost transactions, where footwear is sold at foreign ports to customers who then import the footwear into the United States and other countries.

A summary of the Company’s net sales and long-lived assets by geographic area were as follows:

($ thousands)	2013		2012		2011
Net Sales
United States	$	2,258,605	$	2,251,094	$	2,227,669
Far East		193,725		158,261		99,633
Canada		60,783		68,441		107,464
Total net sales	$	2,513,113	$	2,477,796	$	2,434,766
Long-Lived Assets
United States	$	347,005	$	381,459	$	396,412
Far East		2,454		9,478		10,632
Canada		7,159		7,824		5,223
Latin America, Europe and other		236		70		71
Total long-lived assets	$	356,854	$	398,831	$	412,338

Long-lived assets consisted primarily of property and equipment, intangible assets, prepaid pension costs,  goodwill, and other noncurrent assets.