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Note 8 - Goodwill and Intangible Assets

3 Months Ended

May 02, 2020

Goodwill and Intangible Assets Disclosure [Text Block]

Note 8

Goodwill and Intangible Assets

Goodwill and intangible assets were as follows:

($ thousands)	May 2, 2020			May 4, 2019			February 1, 2020
Intangible Assets
Famous Footwear	$	2,800		$	2,800		$	2,800
Brand Portfolio		365,888			388,288			388,288
Total intangible assets		368,688			391,088			391,088
Accumulated amortization		(99,996	)		(86,987	)		(96,784	)
Total intangible assets, net		268,692			304,101			294,304
Goodwill
Brand Portfolio		4,956			244,407			245,275
Total goodwill		4,956			244,407			245,275
Goodwill and intangible assets, net	$	273,648		$	548,508		$	539,579

The Company's intangible assets as of May 2, 2020, May 4, 2019 and February 1, 2020 were as follows:

($ thousands)

May 2, 2020

Estimated Useful Lives (In Years)

Cost Basis

Accumulated Amortization

Impairment

Net Carrying Value

Trademarks

15 - 40

288,788

94,294

—

194,494

Trademarks

Indefinite

58,100

^⁽¹

⁾

—

22,400

35,700

Customer relationships

15 - 16

44,200

5,702

—

38,498

391,088

99,996

22,400

268,692

		May 4, 2019
	Estimated Useful Lives (In Years)	Cost Basis				Accumulated Amortization		Impairment		Net Carrying Value
Trademarks	15 - 40	$	288,788			$	84,427		—	$	204,361
Trademarks	Indefinite		58,100	⁽¹	⁾		—		—		58,100
Customer relationships	15 - 16		44,200				2,560		—		41,640
		$	391,088			$	86,987		—	$	304,101

		February 1, 2020
	Estimated Useful Lives (In Years)	Cost Basis				Accumulated Amortization		Impairment		Net Carrying Value
Trademarks	15 - 40	$	288,788			$	91,827		—	$	196,961
Trademarks	Indefinite		58,100	⁽¹	⁾		—		—		58,100
Customer relationships	15 - 16		44,200				4,957		—		39,243
		$	391,088			$	96,784		—	$	294,304

^{(1) Cost basis for indefinite-lived trademarks has been reduced by $60.0 million in impairment charges recognized in 2018 related to the Allen Edmonds tradename.}

Amortization expense related to intangible assets was $3.2 million and $3.3 million for the thirteen weeks ended May 2, 2020 and May 4, 2019, respectively. The Company estimates that amortization expense related to intangible assets will be approximately $13.1 million in 2020, $12.9 million in 2021, $12.5 million in 2022, $12.2 million in 2023 and $11.4 million in 2024.

Goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate it might be impaired, using either the qualitative assessment or a quantitative fair value-based test. During the first quarter of 2020, as a result of the significant decline in the Company's share price and market capitalization and the impact of COVID-19 on the Company's business operations, the Company determined that an interim assessment of goodwill was required. A quantitative assessment was performed for all reporting units as of May 2, 2020. The assessment indicated that the carrying value of the goodwill associated with the Brand Portfolio and Vionic reporting units was impaired, resulting in total goodwill impairment charges of $240.3 million. The Company recorded no goodwill impairment charges during the thirteen weeks ended May 4, 2019.

Indefinite-lived intangible assets are tested for impairment as of the first day of the fourth quarter of each fiscal year unless events or circumstances indicate an interim test is required. As a result of the triggering event from the economic impacts of COVID-19, an interim assessment was performed as of May 2, 2020. The indefinite-lived intangible asset impairment review resulted in total impairment charges of $22.4 million for the thirteen weeks ended May 2, 2020, including $12.2 million associated with the indefinite-lived Allen Edmonds trademark and $10.2 million of impairment associated with the indefinite-lived Via Spiga trademark. The carrying value of the Via Spiga trademark of $0.5 million will be amortized over approximately two years. The Company recorded no impairment charges during the thirteen weeks ended May 4, 2019.