ACQUISITIONS AND INTANGIBLES

12 Months Ended

Jan. 31, 2016

Business Combinations [Abstract]

ACQUISITIONS AND INTANGIBLES

NOTE D — ACQUISITIONS AND INTANGIBLES

   Acquisition of G.H. Bass

In November, 2013, the Company acquired from PVH Retail Stores LLC and its affiliates substantially all of the assets of the G.H. Bass & Co. (“G.H. Bass”) business that included approximately 160 G.H. Bass & Co. outlet stores. The purchase price was $49.2 million in cash.

G.H. Bass is a well-known heritage brand that embodies classic American style. The Company sells G.H. Bass & Co. footwear, apparel and accessories primarily through approximately 160 outlet stores located in the United States. The Company also licenses the brand for the wholesale distribution of men’s and women’s footwear, men’s sportswear and men’s and boy’s tailored clothing.

The following table (in thousands) summarizes the components of the purchase price allocation for the acquisition of G.H. Bass:

Purchase price:	​
Cash paid	$	49,236
​	$	49,236
Allocation:	​
Current assets	$	42,967
Property, plant and equipment	​	2,788
Identifiable intangible assets — Trademarks	​	2,490
Other non-current assets, net	​	975
Assumed liabilities	​	(700)
Goodwill	​	716
​	$	49,236

The trademarks were assigned an indefinite useful life. Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies expected to be derived from the combination of G.H. Bass with the other businesses of the retail operations segment.

   Intangible assets balances

Intangible assets consist of:

		January 31,
	Estimated Life	2016		2015
		(In thousands)
Gross carrying amounts
Licenses	14 years	$	19,074	$	19,819
Trademarks	8 – 12 years		2,194		2,194
Customer relationships	8 – 15 years		8,163		8,408
Other	3 – 10 years		4,975		4,844
Subtotal			34,406		35,265
Accumulated amortization
Licenses			14,152		13,815
Trademarks			2,127		2,036
Customer relationships			4,835		4,291
Other			2,426		1,890
Subtotal			23,540		22,032
Net
Licenses			4,922		6,004
Trademarks			67		158
Customer relationships			3,328		4,117
Other			2,549		2,954
Subtotal			10,866		13,233
Unamortized intangible assets
Goodwill			49,437		52,130
Trademarks			67,200		73,097
Subtotal			116,637		125,227
Total intangible assets, net		$	127,503	$	138,460

 

Intangible amortization expense amounted to approximately $1.9 million, $2.0 million and $1.6 million for the years ended January 31, 2016, 2015 and 2014, respectively.

The estimated intangible amortization expense for the next five years is as follows:

Year Ending January 31,	Amortization Expense
	(In thousands)
2017	$	1,874
2018		1,825
2019		1,804
2020		1,459
2021		929

Goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method. The Company reviews and tests its goodwill and intangible assets with indefinite lives for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may be impaired. The Company performs the test in the fourth fiscal quarter of each year using a combination of a discounted cash flow analysis and a market approach. The discounted cash flow approach requires that certain assumptions and estimates be made regarding industry economic factors and future profitability. The market approach estimates the fair value based on comparisons with the market values and market multiples of earnings and revenues of similar public companies.

Trademarks and customer relationships having finite lives are amortized over their estimated useful lives and measured for impairment when events or circumstances indicate that the carrying value may be impaired.

Goodwill has been allocated to the reporting segments based upon the relative fair values of the licenses (wholesale operations segment) and trademarks acquired. At January 31, 2016, the carrying amount of goodwill was $48.7 million and $716,000 in the wholesale operations and retail operations segments, respectively, including $2.7 million in exchange differences arising during the year ended January 31, 2016. At January 31, 2015, the carrying amount of goodwill was $51.4 million and $716,000 in the wholesale operations and retail operations segments, respectively, including $3.5 million in exchange differences arising during the year ended January 31, 2015.