Intangible Assets and Goodwill

12 Months Ended

Mar. 27, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

The following table details the carrying values of the Company’s intangible assets other than goodwill (in millions):


	March 27, 2021						March 28, 2020
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Definite-lived intangible assets:
Reacquired rights	$	400	$	77	$	323	$	400	$	61	$	339
Trademarks	23		21		2		23		20		3

Customer relationships	437		86		351		404		51		353
	860		184		676		827		132		695

Indefinite-lived intangible assets:
Jimmy Choo brand (1)	587		249		338		547		180		367
Versace brand (2)	978		—		978		924		—		924
	1,565		249		1,316		1,471		180		1,291

Total intangible assets, excluding goodwill	$	2,425	$	433	$	1,992	$	2,298	$	312	$	1,986

(1)The year-over-year change in carrying value reflects an impairment charge of $69 million and foreign currency translation of $40 million for the fiscal year ended March 27, 2021. The Company recorded an impairment charge of $180 million for the fiscal year ended March 28, 2020.

(2)The year-over-year change in value relates to foreign currency translation.

Reacquired rights relate to the Company’s reacquisition of the rights to use the Michael Kors trademarks and to import, sell, advertise and promote certain of its products in the previously licensed territories in the Greater China region and are being amortized through March 31, 2041, the expiration date of the related license agreement. The trademarks relate to the Michael Kors brand name and are amortized over twenty years. Customer relationships are generally amortized over five to eighteen years. Amortization expense for the Company’s definite-lived intangibles was $47 million, $49 million and $37 million, respectively, for each of the fiscal years ended March 27, 2021, March 28, 2020 and March 30, 2019.

Indefinite-lived intangible assets other than goodwill included the Versace and Jimmy Choo brands, which were recorded in connection with the acquisitions of Versace and Jimmy Choo, and have an indefinite life due to being essential to the Company’s ability to operate the Versace and Jimmy Choo businesses for the foreseeable future.

Estimated amortization expense for each of the next five years is as follows (in millions):


Fiscal 2022	$	47
Fiscal 2023	47
Fiscal 2024	47
Fiscal 2025	47
Fiscal 2026	47
Fiscal 2027 and thereafter	441
	$	676

The future amortization expense above reflects weighted-average estimated remaining useful lives of 20 years for reacquired rights, 2 years for trademarks and 12 years for customer relationships.

The following table details the changes in goodwill for each of the Company’s reportable segments (in millions):


	Versace		Jimmy Choo		Michael Kors		Total
Balance at March 30, 2019	861		678		120		$	1,659
Acquisition	—		11		—		11
Measurement period adjustment (1)	26		—		—		26
Impairment charges (2)	—		(171)		—		(171)
Foreign currency translation	(6)		(31)		—		(37)
Balance at March 28, 2020	881		487		120		1,488


Impairment charges (2)	—		(94)		—		(94)
Foreign currency translation	52		52		—		104
Balance at March 27, 2021	$	933	$	445	$	120	$	1,498

(1)See Note 5 for additional information.

(2)The Company recorded impairment charges during Fiscal 2021 of $94 million related to the Jimmy Choo wholesale and licensing reporting units, and $171 million during Fiscal 2020 related to the Jimmy Choo retail and licensing reporting units.

The Company’s goodwill and the Versace and Jimmy Choo brands are not subject to amortization but are evaluated for impairment annually in the last quarter of each fiscal year, or whenever impairment indicators exist. During the fourth quarter of Fiscal 2021, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for its three segments. The Company performed its goodwill impairment assessment for its Michael Kors segment using a qualitative assessment. Based on the results of the Company’s qualitative impairment assessment, the Company concluded that it is more likely than not that the fair value of the Michael Kors’ reporting units exceeded their carrying value and, therefore, were not impaired.

The Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for both the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair value of each brands' reporting units. The Company also elected to perform an impairment analysis for both the Versace and Jimmy Choo brand indefinite-lived intangible assets using an income approach to estimate the fair values. Based on the results of these assessments, the Company determined there was no impairment loss for the Jimmy Choo Retail reporting unit. The Company also concluded that the fair values of the Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.

However, the Company concluded that the fair value of the Jimmy Choo Wholesale and Jimmy Choo Licensing reporting units, along with the Jimmy Choo brand indefinite-lived intangible assets, did not exceed their related carrying amounts. These impairment charges were primarily related to higher discount rates in the current year driven by a change in market factors as well as a shift in expected revenue and earnings mix to the retail segment.

Accordingly, the Company recorded impairment charges of $94 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $69 million related to the Jimmy Choo brand intangible assets during Fiscal 2021. The Company recorded impairment charges of $171 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $180 million related to the Jimmy Choo brand intangible assets during Fiscal 2020. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive (loss) income for the fiscal years ended March 27, 2021 and March 28, 2020. The Company did not record any such impairment charges in Fiscal 2019. See Note 14 for additional information.