Fair Value Measurements

12 Months Ended

Jan. 31, 2023

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]

Fair Value Measurements

NOTE 11 - FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

•Level 3 - Unobservable inputs based on the Company’s assumptions.

The guidance requires the use of observable market data if such data is available without undue cost and effort.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of January 31, 2023 and 2022 (in thousands):

		Fair Value at January 31, 2023
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	263	$	—	$	—	$	263
Short-term investment	Other current assets		156		—		—		156
SERP assets - employer	Other non-current assets		738		—		—		738
SERP assets - employee	Other non-current assets		44,442		—		—		44,442
Defined benefit plan assets (1)	Other non-current liabilities		—		—		27,965		27,965
Hedge derivatives	Other current assets		—		1,146		—		1,146
Total		$	45,599	$	1,146	$	27,965	$	74,710
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	44,442	$	—	$	—	$	44,442
Hedge derivatives	Accrued liabilities		—		192		—		192
Total		$	44,442	$	192	$	—	$	44,634

		Fair Value at January 31, 2022
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities	Other current assets	$	249	$	—	$	—	$	249
Short-term investment	Other current assets		164		—		—		164
SERP assets - employer	Other non-current assets		772		—		—		772
SERP assets - employee	Other non-current assets		47,261		—		—		47,261
Defined benefit plan assets (1)	Other non-current assets		—		—		29,096		29,096
Hedge derivatives	Other current assets		—		197		—		197
Total		$	48,446	$	197	$	29,096	$	77,739
Liabilities:
SERP liabilities - employee	Other non-current liabilities	$	47,261	$	—	$	—	$	47,261
Hedge derivatives	Accrued liabilities		—		170		—	$	170
Total		$	47,261	$	170	$	—	$	47,431

(1)See Note 19 for a discussion of the fair value of the assets held in the Company’s defined benefit plan in Switzerland.

The fair values of the Company’s available-for-sale securities are based on quoted market prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives consist of cash flow hedging instruments and forward contracts (see Note 10 for further discussion) and are entered into by the Company principally to reduce its exposure to Swiss Franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates.

The Company sponsors a defined pension plan in Switzerland. The plan covers certain international employees and is based on years of service and compensation on a career-average pay basis. The assets within the plan are classified as a Level 3 asset within the fair value hierarchy and consist of an investment in pooled assets and include separate employee accounts that are invested in equity securities, debt securities and real estate. The values of the separate accounts invested are based on values provided by the administrator of the funds that cannot be readily derived from or corroborated by observable market data. The value of the assets is part of the funded status of the defined benefit plan and included in other non-current liabilities and other non-current assets in the consolidated balance sheets at January 31, 2023 and January 31, 2022, respectively.

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

See Note 6 – Goodwill and Intangible Assets for a discussion on the Company’s impairment charges taken in fiscal year 2021 for certain of its nonfinancial assets measured at fair value on a nonrecurring basis due to a change in circumstances that triggered an interim impairment test, and the valuation techniques used to measure the fair value. The most significant unobservable inputs (Level 3) used to estimate the fair values of the Company’s Watch and Accessory Brands unit’s goodwill and MVMT’s intangible assets are discount rates, which was 17.5% for both.

Investments Without Readily Determinable Fair Values

From time to time the Company may make minority investments in growth companies in the consumer products sector and other sectors relevant to its business, including certain of the Company's suppliers and customers, as well as in venture capital funds that invest in companies in media, entertainment, information technology and technology-related fields and in digital assets. During fiscal 2023 and 2022, the Company invested approximately $3.3 million and $2.0 million, respectively, in venture capital funds (see Note 12 - Commitments and Contingencies for discussion of commitments made related to venture capital funds). The Company has evaluated and will regularly evaluate the carrying value of its investments. There were no adjustments to the original cost value during fiscal 2023 or fiscal 2022. The carrying value of the investments are recorded in Other non-current assets in the Consolidated Balance Sheets at January 31, 2023 and January 31, 2022.