Segment and Geographic Information

6 Months Ended

Jul. 31, 2021

Segment Reporting [Abstract]

Segment and Geographic Information

NOTE 18 – SEGMENT AND GEOGRAPHIC INFORMATION

The Company conducts its business in two operating segments: Watch and Accessory Brands and Company Stores. The Company’s Watch and Accessory Brands segment includes the designing, manufacturing and distribution of watches and, to a lesser extent, jewelry and other accessories, of owned and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Company Stores segment includes the Company’s retail outlet business. The Chief Executive Officer of the Company is the chief operating decision maker (“CODM”) and regularly reviews operating results for each of the two operating segments to assess performance and makes operating decisions about the allocation of the Company’s resources.

The Company divides its business into two major geographic locations: United States operations and International, which includes the results of all non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Middle East, Asia and the Americas (excluding the United States) accounted for 33.4%, 8.2%, 4.8% and 4.4%, respectively, of the Company’s total net sales for the three months ended July 31, 2021. For the three months ended July 31, 2020, the Company’s International operations in Europe, the Middle East, Asia and the Americas (excluding the United States) accounted for 39.6%, 11.3%, 7.1% and 2.7%, respectively, of the Company’s total net sales. The Company’s International operations in Europe, the Middle East, the Americas (excluding the United States) and Asia accounted for 31.4%, 8.3%, 6.3% and 5.0%, respectively, of the Company’s total net sales for the six months ended July 31, 2021. For the six months ended July 31, 2020, the Company’s International operations in Europe, the Middle East, Asia and the Americas (excluding the United States) accounted for 38.8%, 8.0%, 7.7% and 5.5%, respectively, of the Company’s total net sales.        

Operating Segment Data for the Three Months Ended July 31, 2021 and 2020 (in thousands):

	Net Sales
	2021		2020
Watch and Accessory Brands:
Owned brands category	$	60,902	$	31,622
Licensed brands category		84,077		46,414
After-sales service and all other		1,200		153
Total Watch and Accessory Brands		146,179		78,189
Company Stores		27,695		10,349
Consolidated total	$	173,874	$	88,538

	Operating Income/(Loss) (3)(5)
	2021		2020
Watch and Accessory Brands	$	15,718	$	(9,945	)
Company Stores		8,915		1,029
Consolidated total	$	24,633	$	(8,916	)

Operating Segment Data as of and for the Six Months Ended July 31, 2021 and 2020 (in thousands):

	Net Sales
	2021		2020
Watch and Accessory Brands:
Owned brands category	$	109,273	$	56,983
Licensed brands category		151,703		82,098
After-sales service and all other		1,482		2,394
Total Watch and Accessory Brands		262,458		141,475
Company Stores		46,214		16,729
Consolidated total	$	308,672	$	158,204

	Operating Income/(Loss) (3)(4)(5)
	2021		2020
Watch and Accessory Brands	$	24,503	$	(189,566	)
Company Stores		13,386		(1,513	)
Consolidated total	$	37,889	$	(191,079	)

	Total Assets
	July 31,  2021		January 31,  2021		July 31,  2020
Watch and Accessory Brands	$	651,495	$	659,681	$	618,419
Company Stores		59,403		59,576		61,270
Consolidated total	$	710,898	$	719,257	$	679,689

Geographic Location Data for the Three Months Ended July 31, 2021 and 2020 (in thousands):

	Net Sales				Operating Income/(Loss) (3)(5)
	2021		2020		2021		2020
United States (1)	$	85,487	$	34,766	$	8,820	$	(14,319	)
International (2)		88,387		53,772		15,813		5,403
Consolidated total	$	173,874	$	88,538	$	24,633	$	(8,916	)

United States and International net sales are net of intercompany sales of $90.7 million and $29.1 million for the three months ended July 31, 2021 and 2020, respectively.

Geographic Location Data as of and for the Six Months Ended July 31, 2021 and 2020 (in thousands):

	Net Sales				Operating Income/(Loss) (3)(4)(5)
	2021		2020		2021		2020
United States (1)	$	151,380	$	63,300	$	9,579	$	(134,309	)
International (2)		157,292		94,904		28,310		(56,770	)
Consolidated total	$	308,672	$	158,204	$	37,889	$	(191,079	)

United States and International net sales are net of intercompany sales of $160.4 million and $71.9 million for the six months ended July 31, 2021 and 2020, respectively.

(1)The United States operating income/(loss) included $13.0 million and $6.1 million of unallocated corporate expenses for the three months ended July 31, 2021 and 2020, respectively. The United States operating income/(loss) included $21.9 million and $12.1 million of unallocated corporate expenses for the six months ended July 31, 2021 and 2020, respectively.     

(2)The International operating income included $16.9 million and $11.2 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended July 31, 2021 and 2020, respectively. The International operating income/(loss) included $30.8 million and $22.3 million of certain intercompany profits related to the Company’s supply chain operations for the six months ended July 31, 2021 and 2020, respectively.   

(3)For the three months ended July 31, 2021 and 2020, and for the six months ended July 31, 2021 and 2020, in the United States locations of the Watch and Accessory Brands segment, operating income/(loss) included a charge of $0.1 million, $0.3 million, $0.2 million and $1.0 million, respectively, related to the amortization of intangible assets, deferred compensation and certain acquisition accounting adjustments associated with the MVMT brand. In addition, in the International locations of the Watch and Accessory Brands segment for the three months ended July 31, 2021 and 2020, and for the six months ended July 31, 2021 and 2020, operating income/(loss) included a charge of $0.7 million, $0.7 million, $1.4 and $1.4 million, respectively, related to the amortization of acquired intangible assets as a result of the Company’s acquisition of the Olivia Burton brand.

(4)For the six months ended July 31, 2020, in the United States locations of the Watch and Accessory Brands segment, operating loss included a charge of $99.7 million, related to the impairment of goodwill and intangible assets associated with the MVMT brand. In addition, in the International locations of the Watch and Accessory Brands segment, for the six months ended July 31, 2020, operating loss included a charge of $56.2 million related to the impairment of goodwill associated with the Olivia Burton brand and City Time Joint Venture.

(5)For the three months ended July 2020, in the United States locations and the International locations of the Watch and Accessory Brands segment, operating (loss)/income included a charge of $6.6 million and $0.8 million, respectively, related to the corporate initiatives that the Company took in response to the impact on its business due to the COVID-19 pandemic. For the six months ended July 2020, in the United States locations and the International locations of the Watch and Accessory Brands segment, operating loss included a charge of $11.3 million and $3.3 million, respectively, related to the corporate initiatives that the Company took in response to the impact on its business due to the COVID-19 pandemic.  

	Total Assets
	July 31,  2021		January 31,  2021		July 31,  2020
United States	$	350,187	$	352,517	$	313,411
International		360,711		366,740		366,278
Consolidated total	$	710,898	$	719,257	$	679,689

	Property, Plant and Equipment, Net
	July 31,  2021		January 31,  2021		July 31,  2020
United States	$	13,014	$	14,792	$	16,825
International		6,642		7,557		9,063
Consolidated total	$	19,656	$	22,349	$	25,888