SEGMENTS

3 Months Ended

Apr. 30, 2023

SEGMENTS [Abstract]

SEGMENTS

NOTE 10 – SEGMENTS

The Company’s reportable segments are business units that offer products through different channels of distribution. The Company has two reportable segments: wholesale operations and retail operations. The wholesale operations segment includes sales of products under the Company’s owned, licensed and private label brands, as well as sales related to the Vilebrequin and Karl Lagerfeld businesses, other than sales of the Karl Lagerfeld Paris brand from retail stores and digital outlets. Wholesale revenues also include revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H. Bass, Andrew Marc and Sonia Rykiel. The retail operations segment consists primarily of direct sales to consumers through Company-operated stores, which consists primarily of DKNY and Karl Lagerfeld Paris stores, as well as the digital channels for DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass, Andrew Marc and Wilsons Leather. Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores.

The following segment information is presented for the three month periods indicated below:

	Three Months Ended April 30, 2023
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	586,903	$	30,217	$	(10,531)	$	606,589
Cost of goods sold		352,470		14,849		(10,531)		356,788
Gross profit		234,433		15,368		—		249,801
Selling, general and administrative expenses		204,089		23,872		—		227,961
Depreciation and amortization		5,745		831		—		6,576
Operating profit (loss)	$	24,599	$	(9,335)	$	—	$	15,264

	Three Months Ended April 30, 2022
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	680,904	$	27,885	$	(20,032)	$	688,757
Cost of goods sold		448,769		13,981		(20,032)		442,718
Gross profit		232,135		13,904		—		246,039
Selling, general and administrative expenses		161,808		23,599		—		185,407
Depreciation and amortization		5,414		681		—		6,095
Operating profit (loss)	$	64,913	$	(10,376)	$	—	$	54,537

(1)Represents intersegment sales to the Company’s retail operations segment.

The total net sales by licensed and proprietary product sales for each of the Company’s reportable segments are as follows:

	Three Months Ended
	April 30, 2023		April 30, 2022
	(In thousands)
Licensed brands	$	298,005	$	459,984
Proprietary brands		288,898		220,920
Wholesale net sales(1)	$	586,903	$	680,904
Licensed brands	$	—	$	13,928
Proprietary brands		30,217		13,957
Retail net sales	$	30,217	$	27,885

(1) The Company acquired the remaining interests in KLH (the Karl Lagerfeld branded product) that it did not already own as of May 31, 2022. Net sales of Karl Lagerfeld product were included in licensed brand net sales of the wholesale operations segment through May 31, 2022. Subsequent to May 31, 2022, net sales of Karl Lagerfeld product are included in proprietary brands net sales of the wholesale operations segment.