Intangible Assets and Goodwill

12 Months Ended

Apr. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

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


	April 1, 2023						April 2, 2022
	Gross Carrying Amount		Accumulated Amortization/Impairment		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization/Impairment		Net Carry Amount
Definite-lived intangible assets:
Reacquired rights	$	400	$	109	$	291	$	400	$	94	$	306
Trademarks	23		23		—		23		22		1

Customer relationships	397		136		261		414		112		302
Total definite-lived intangible assets	820		268		552		837		228		609

Indefinite-lived intangible assets:
Jimmy Choo brand (1)	550		273		277		570		249		321
Versace brand (2)	899		—		899		917		—		917
Total indefinite-lived intangible assets	1,449		273		1,176		1,487		249		1,238

Total intangible assets, excluding goodwill	$	2,269	$	541	$	1,728	$	2,324	$	477	$	1,847

(1)The year-over-year change in net carrying amount reflects an impairment charge of $24 million and foreign currency translation of $20 million for the fiscal year ended April 1, 2023. There was no impairment charge for the fiscal year ended April 2, 2022.

(2)The year-over-year change in net carrying amount reflects foreign currency translation for the fiscal year ended April 1, 2023.

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 former licensing 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 $44 million, $49 million and $47 million, respectively, for each of the fiscal years ended April 1, 2023, April 2, 2022 and March 27, 2021.

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 as they are 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 2024	$	44
Fiscal 2025	44
Fiscal 2026	44
Fiscal 2027	44
Fiscal 2028	43
Fiscal 2029 and thereafter	333
Total	$	552

The future amortization expense above reflects weighted-average estimated remaining useful lives of eighteen years for reacquired rights and ten 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 27, 2021	$	933	$	445	$	120	$	1,498



Foreign currency translation	(59)		(21)		—		(80)
Balance at April 2, 2022	874		424		120		1,418


Impairment charges(1)	—		(82)		—		(82)
Foreign currency translation	(17)		(26)		—		(43)
Balance at April 1, 2023	$	857	$	316	$	120	$	1,293

(1)The Company recorded impairment charges of $82 million during Fiscal 2023 related to the Jimmy Choo retail and wholesale reporting units. As of April 1, 2023, the Company had accumulated impairment charges of $347 million related to Jimmy Choo 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 2023, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis. The Company performed its goodwill impairment assessment for its Michael Kors reporting units 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 for the Jimmy Choo Licensing reporting unit goodwill or Wholesale brand intangible assets and Versace reporting units goodwill or brand intangible assets, as the fair values of the reporting units and the brand intangible assets exceeded the related carrying amounts.

However, the Company concluded that the fair value of the Jimmy Choo Retail and Wholesale reporting units goodwill, along with the Jimmy Choo Retail brand indefinite-lived intangible assets did not exceed their related carrying amounts. These impairment charges were primarily related to a higher discount rate in the current year driven by higher risk-free rates. Accordingly, the Company recorded goodwill impairment charges of $82 million related to the Jimmy Choo Retail and Wholesale reporting units and $24 million related to the Jimmy Choo Retail brand intangible assets during Fiscal 2023. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal year ended April 1, 2023.

In Fiscal 2022, the Company did not incur any impairment charges. In Fiscal 2021, the Company recorded goodwill impairment charges of $94 million related to the Jimmy Choo Wholesale and Jimmy Choo Licensing reporting units and impairment charges of $69 million related to the Jimmy Choo brand intangible assets. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal year ended March 27, 2021. See Note 13 for additional information.