Concentration of Credit Risk, Major Customers and Suppliers

12 Months Ended

Apr. 02, 2016

Risks and Uncertainties [Abstract]

Concentration of Credit Risk, Major Customers and Suppliers

Concentration of Credit Risk, Major Customers and Suppliers

Financial instruments that subject the Company to concentration of credit risk are cash and cash equivalents and receivables. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. The Company mitigates its risk by depositing cash and cash equivalents in major financial institutions. The Company also mitigates its credit risk by obtaining insurance coverage for a substantial portion of its receivables (as demonstrated in the above table in “Credit risk assumed by insured/factors”). For the fiscal years ended April 2, 2016, March 28, 2015 and March 29, 2014, net sales related to our largest wholesale customer, Macy's, accounted for approximately 12.7%, 13.7% and 14.4%, respectively, of total revenue. The accounts receivable related to this customer were either factored or substantially insured for all three fiscal years. No other customer accounted for 10% or more of the Company’s total revenues during Fiscal 2016, Fiscal 2015, or Fiscal 2014.

The Company contracts for the purchase of finished goods principally with independent third-party contractors, whereby the contractor is generally responsible for all manufacturing processes, including the purchase of piece goods and trim. Although the Company does not have any long-term agreements with any of its manufacturing contractors, the Company believes it has mutually satisfactory relationships with them. The Company allocates product manufacturing among agents and contractors based on their capabilities, the availability of production capacity, quality, pricing and delivery. The inability of certain contractors to provide needed services on a timely basis could adversely affect the Company’s operations and financial condition. The Company has relationships with various agents who source the Company’s finished goods with numerous contractors on the Company’s behalf. For the fiscal years ended April 2, 2016, March 28, 2015 and March 29, 2014, one agent sourced approximately 14.9%, 11.7% and 12.6%, respectively, and one contractor accounted for approximately 26.7%, 29.1% and 30.4%, respectively, of the Company’s finished goods purchases.