Segment Information

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Segment Information

9. Segment Information

The Company designs and sources a broad range of fashion footwear, handbags, accessories, and apparel and has three reportable segments: Wholesale, Consumer Direct and Licensing. The Wholesale segment markets footwear, handbags and men's and women's apparel products for sale to approximately 5,200 domestic department and specialty store locations, the Company's Consumer Direct segment and international retailers. The Consumer Direct segment markets a broad selection of the Company's branded products, including licensee products, for sale directly to the consumer through its own channels of distribution, which include full-priced retail stores, Company Stores ("outlets") and its e-commerce website (at website address www.kennethcole.com). The Licensing segment, through third-party licensee agreements, has evolved the Company from primarily a footwear resource to a diverse global lifestyle brand competing effectively in approximately 30 apparel and accessories categories for men, women and children. The Company maintains control over quality, brand image and distribution of the licensees' products. The segment consists primarily of royalties earned on domestic and international licensee sales to third parties of products bearing the Company's trademarks and trade names.

The Company's reportable segments are business units that offer products to overlapping consumers through different channels of distribution. Each segment is managed separately, while results across segments are reviewed by the executive management committee. The Company evaluates performance of each of its segments and allocates resources based on profit or loss before store closing and severance costs, stock-based compensation expense, writedown of available-for-sale securities, impairment of intangible and long-lived assets, unallocated corporate overhead and income taxes for each segment.

Financial information of the Company's reportable segments is as follows (in thousands):

		Three Months Ended									Nine Months Ended
		September 30, 2011									September 30, 2011
		Wholesale		Consumer Direct			Licensing		Totals		Wholesale			Consumer Direct			Licensing		Totals
Net revenues	$	79,690	$	36,543		$	11,782	$	128,015	$	206,180		$	109,392		$	32,161	$	347,733
Segment income/(loss) (1)(2)		2,504		(3,642	)		9,723		8,585		(2,362	)		(13,356	)		26,347		10,629
Segment assets (3)											205,623			45,325			10,446		261,394

		Three Months Ended									Nine Months Ended
		September 30, 2010									September 30, 2010
		Wholesale		Consumer Direct			Licensing		Totals		Wholesale		Consumer Direct			Licensing		Totals
Net revenues	$	62,486	$	45,007		$	11,543	$	119,036	$	176,989	$	126,785		$	32,747	$	336,521
Segment income/(loss) (1)(2)		1,518		(5,590	)		9,650		5,578		3,897		(15,068	)		25,998		14,827
Segment assets (3)											212,202		54,559			11,010		277,771

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(1)	Excludes store closing and severance costs, stock-based compensation expense, writedown of available-for-sale securities, impairment of intangible and long-lived assets, unallocated corporate overhead and income taxes.
(2)	The Wholesale segment includes primarily all of the Company's allocated corporate overhead.
(3)	The Wholesale segment includes corporate assets.

The reconciliation of the Company's reportable segment income to total income/(loss) is as follows (in thousands):

		Three Months Ended						Nine Months Ended
		September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Income/(loss)
Total income for reportable segments (1)	$	8,585		$	5,578		$	10,629		$	14,827
Adjustment for store closing and severance costs, stock- based compensation expense, writedown of available- for-sale securities, impairment of intangible and long- lived assets and unallocated corporate overhead		(2,639	)		(3,473	)		(21,000	)		(9,692	)
Total income/(loss) before provision for income taxes	$	5,946		$	2,105		$	(10,371	)	$	5,135

(1)   Excludes store closing and severance costs, stock-based compensation expense, writedown of available-for-sale securities, impairment of intangible and long-lived assets, unallocated corporate overhead and income taxes

       Revenues from international customers were approximately 9.6% and 6.9% of the Company's consolidated revenues for the three months ended September 30, 2011 and 2010, respectively, and approximately 8.5% and 6.5% of the Company's consolidated revenues for the nine months ended September 30, 2011 and September 30, 2010, respectively.