Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Other Intangible Assets

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Goodwill and Other Intangible Assets
9 Months Ended
Oct. 29, 2016
Goodwill and Other Intangible Assets  
Goodwill and Other Intangible Assets

11.  Goodwill and Other Intangible Assets

 

Please refer to Note 3 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended January 30, 2016 for information on impairment charges recorded in fiscal 2015 related to goodwill and intangible assets for Jos. A. Bank.

 

Goodwill

 

Goodwill allocated to our reportable segments and changes in the net carrying amount of goodwill for the nine months ended October 29, 2016 are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

    

Retail

    

Apparel

    

Total

 

Balance at January 30, 2016

 

$

93,201

 

$

25,385

 

$

118,586

 

Translation adjustment

 

 

921

 

 

(3,481)

 

 

(2,560)

 

Balance at October 29, 2016

 

$

94,122

 

$

21,904

 

$

116,026

 

 

Goodwill is evaluated for impairment at least annually. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. Such events or circumstances could include, but are not limited to, new significant negative industry or economic trends, unanticipated changes in the competitive environment, decisions to significantly modify or dispose of operations and a significant sustained decline in the market price of our stock. No impairment evaluation was considered necessary during the first nine months ended October 29, 2016.

 

Intangible Assets 

 

The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

    

October 29,

    

October 31,

 

January 30,

 

 

    

2016

    

2015

    

2016

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

Carrying amount:

 

 

 

 

 

 

 

 

 

 

Trademarks and tradenames

 

$

15,897

 

$

16,516

 

$

16,292

 

Favorable leases

 

 

14,381

 

 

24,118

 

 

14,675

 

Customer relationships

 

 

24,750

 

 

85,515

 

 

29,129

 

Total carrying amount

 

 

55,028

 

 

126,149

 

 

60,096

 

Accumulated amortization:

 

 

 

 

 

 

 

 

 

 

Trademarks and tradenames

 

 

(9,930)

 

 

(9,679)

 

 

(9,728)

 

Favorable leases

 

 

(4,045)

 

 

(4,025)

 

 

(2,739)

 

Customer relationships

 

 

(12,891)

 

 

(24,507)

 

 

(13,459)

 

Total accumulated amortization

 

 

(26,866)

 

 

(38,211)

 

 

(25,926)

 

Total amortizable intangible assets, net

 

 

28,162

 

 

87,938

 

 

34,170

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

Trademarks and tradename, net

 

 

144,175

 

 

480,233

 

 

144,340

 

Total intangible assets, net

 

$

172,337

 

$

568,171

 

$

178,510

 

 

Pre-tax amortization expense associated with intangible assets subject to amortization totaled $1.2 million and $3.7 million for the three and nine months ended October 29, 2016. Pre-tax amortization expense associated with intangible assets subject to amortization totaled $3.4 million and $10.5 million for the three and nine months ended October 31, 2015, respectively.  Pre-tax amortization associated with intangible assets subject to amortization at October 29, 2016 is estimated to be $1.2 million for the remainder of fiscal 2016, $4.2 million for fiscal 2017, $4.0 million for fiscal 2018,  $3.8 million for fiscal 2019 and $3.6 million for fiscal 2020.

 

In the third quarter of 2015, we concluded that a triggering event occurred that required an interim impairment test for the Jos. A. Bank tradename.  The fair value of the Jos. A. Bank tradename was estimated using a relief from royalty method, which calculated the present value of savings resulting from the right to sell products without having to pay a royalty fee.  Critical assumptions that were used in this method included future sales projections, an estimated royalty rate and a discount rate.  Based on this analysis, during the third quarter of 2015, we concluded that the Jos. A. Bank tradename was impaired and recorded a non-cash impairment charge of $90.1 million, which is included as a separate line in the condensed statement of earnings (loss), and relates to our retail segment.