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Long-lived Asset Impairment Charges Related to the Pandemic
 9 Months Ended
Oct. 31, 2020
Property, Plant and Equipment [Abstract]  
Long-lived Asset Impairment Charges Related to the Pandemic LONG-LIVED ASSET IMPAIRMENT CHARGES RELATED TO THE PANDEMIC
Long-lived assets, including definite-lived intangibles, are reviewed periodically for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company uses market participant rent assumptions to calculate the fair value of right of use ("ROU") assets and discounted future cash flows of the asset or asset group using projected financial information and a discount rate that approximates the cost of capital of a market participant to quantify fair value for other long-lived assets. The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets, which for our retail stores, is primarily at the store level.
During the thirteen weeks ended May 2, 2020 (the "first quarter"), the Company experienced significant operating and cash flow losses as a result of the pandemic. As a result, the Company reduced its level of forecasted earnings for fiscal 2020 and future periods across all of its brands. In light of the temporary closure of all its stores across North America during the first quarter of fiscal 2020 and lower-than-expected earnings for fiscal 2020 and future periods, the Company concluded that these factors, among other factors, represented impairment indicators which required the Company to test certain of its long-lived assets at all retail stores for impairment during the first quarter of fiscal 2020. During the thirteen weeks ended October 31, 2020, the Company considered whether events or changes in circumstances existed that would indicate the carrying amount of long-lived assets at all retail stores may not be recoverable. Based on review of both quantitative and qualitative factors, we determined that we currently do not have a triggering event that would require the additional testing of its long-lived assets at all retail stores for impairment, but certain underperforming stores with impairment indicators were assessed for impairment during the thirteen weeks ended October 31, 2020.
During the thirteen and thirty-nine weeks ended October 31, 2020, we recorded pre-tax impairment charges of approximately $8.8 million and $27.3 million, respectively, upon completion of our evaluation of long-lived assets which primarily consisted of leasehold improvements at certain underperforming stores, capitalized implementation costs related to our cloud computing arrangements and other technology-related assets as a result of the impact of the pandemic. For the thirteen weeks ended October 31, 2020, these charges are reflected in the financial statements as $0.4 million in cost of goods sold and $8.4 million in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of loss. For the thirty-nine weeks ended October 31, 2020, these charges are reflected in the financial statements as $18.4 million in cost of goods sold and $8.9 million in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of loss. Pre-tax impairment charges reduced the net carrying value of long-lived assets at retail stores to their estimated fair value, as determined using a discounted cash flow model. Pre-tax impairment charges for the thirteen and thirty-nine weeks ended November 2, 2019 were immaterial.
During the thirty-nine weeks ended October 31, 2020, we completed an evaluation of our operating lease assets for indicators of impairment as a result of the impact of the pandemic, and consequently, recorded pre-tax impairment charges of approximately $3.2 million, which is included in cost of goods sold within the accompanying unaudited condensed consolidated statements of loss. We did not record impairment charges related to our operating lease assets during the thirteen weeks ended October 31, 2020 and thirteen and thirty-nine weeks ended November 2, 2019.