Goodwill and Other Intangible Assets

6 Months Ended

Aug. 03, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill by segment were as follows:



In Thousands	Schuh Group			Journeys Group			Total Goodwill
Balance, February 2, 2019	$	83,243		$	9,838		$	93,081
Effect of foreign currency exchange rates	(5,873		)	(82		)	(5,955		)
Balance, August 3, 2019	$	77,370		$	9,756		$	87,126

As required under ASC 350, the Company annually assesses its goodwill and indefinite lived trade names for impairment and on an interim basis if indicators of impairment are present. The Company’s annual assessment date of goodwill and indefinite lived trade names is the first day of the fourth quarter.

During the fourth quarter of Fiscal 2019, because the Schuh Group business has continued to perform below the Company's projected operating results, the Company performed impairment testing as of February 2, 2019. The Company found that the result of the impairment test, which valued the business at approximately $10.8 million in excess of its carrying value, indicated no impairment at that time. The Company may determine in connection with future impairment tests that some or all of the carrying value of the goodwill may be impaired. Such a finding would require a write-off of the amount of the carrying value that is impaired, which would reduce the Company's profitability in the period of the impairment charge. Holding all other assumptions constant as of the measurement date, the Company noted that an increase in the weighted average cost of capital of 100 basis points would reduce the fair value of the Schuh Group business by $11.4 million. Furthermore, the Company noted that a decrease in projected annual revenue growth by one percent would reduce the fair value of the Schuh Group business by $7.4 million. However, if other assumptions do not remain constant, the fair value of the Schuh Group business may decrease by a greater amount. There were no impairment indicators for the six months ended August 3, 2019.

Other Intangible Assets

Other intangibles by major classes were as follows:



	Leases⁽¹⁾					Customer Lists						Other⁽²⁾						Total
In Thousands	Aug 3, 2019		Feb 2, 2019			Aug 3, 2019			Feb 2, 2019			Aug 3, 2019			Feb 2, 2019			Aug 3, 2019			Feb 2, 2019
Gross other intangibles	$	—	$	3,532		$	1,353		$	1,450		$	595		$	641		$	1,948		$	5,623
Accumulated amortization	—		(2,916		)	(1,353		)	(1,450		)	(322		)	(314		)	(1,675		)	(4,680		)
Net Other Intangibles	$	—	$	616		$	—		$	—		$	273		$	327		$	273		$	943

⁽¹⁾Intangible lease assets now recorded as part of operating lease right of use asset under ASC 842.

⁽²⁾Includes vendor contract.

Note 2

Goodwill and Other Intangible Assets, Continued

The amortization of intangibles was less than $0.1 million for each of the second quarters and first six months of Fiscal 2020 and 2019. The amortization of intangibles will be less than $0.1 million per year for the next five years.