Note 9 - Goodwill and Intangible Assets

9 Months Ended

Nov. 02, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note 9 Goodwill and Intangible Assets

Goodwill and intangible assets were as follows:

($ thousands)	November 2, 2019			November 3, 2018			February 2, 2019
Intangible Assets
Famous Footwear	$	2,800		$	2,800		$	2,800
Brand Portfolio		388,288			448,288			388,288
Total intangible assets		391,088			451,088			391,088
Accumulated amortization		(93,518	)		(80,581	)		(83,722	)
Total intangible assets, net		297,570			370,507			307,366
Goodwill
Brand Portfolio		245,275			283,345			242,531
Total goodwill		245,275			283,345			242,531
Goodwill and intangible assets, net	$	542,845		$	653,852		$	549,897

As further described in Note 3 to the condensed consolidated financial statements, the Company acquired Vionic on October 18, 2018.  The allocation of the purchase price resulted in incremental intangible assets of $144.7 million, consisting of trademarks and customer relationships of $112.4 million and $32.3 million, respectively, and incremental goodwill of $151.3 million.  In addition, the Company acquired Blowfish Malibu on July 6, 2018.  The allocation of the purchase price resulted in incremental intangible assets of $17.6 million, consisting of trademarks and customer relationships of $11.1 million and $6.5 million, respectively, and incremental goodwill of $5.0 million.

The Company's intangible assets as of November 2, 2019, November 3, 2018 and February 2, 2019 were as follows:

($ thousands)		November 2, 2019
	Estimated Useful Lives	Cost Basis		Accumulated Amortization		Net Carrying Value
Trademarks	15-40 years	$	288,788	$	89,360	$	199,428
Trademarks	Indefinite		58,100		—		58,100
Customer relationships	15-16 years		44,200		4,158		40,042
		$	391,088	$	93,518	$	297,570

		November 3, 2018
	Estimated Useful Lives	Cost Basis		Accumulated Amortization		Net Carrying Value
Trademarks	15-40 years	$	288,788	$	79,686	$	209,102
Trademarks	Indefinite		118,100		—		118,100
Customer relationships	15-20 years		44,200		895		43,305
		$	451,088	$	80,581	$	370,507

		February 2, 2019
	Estimated Useful Lives	Cost Basis		Accumulated Amortization		Impairment		Net Carrying Value
Trademarks	15-40 years	$	288,788	$	81,961	$	—	$	206,827
Trademarks	Indefinite		118,100		—		60,000		58,100
Customer relationships	15-16 years		44,200		1,761		—		42,439
		$	451,088	$	83,722	$	60,000	$	307,366

Amortization expense related to intangible assets was $3.3 million and $1.8 million for the thirteen weeks ended November 2, 2019 and November 3, 2018, respectively, and $9.8 million and $3.9 million for the thirty-nine weeks ended November 2, 2019 and November 3, 2018, respectively. The Company estimates that amortization expense related to intangible assets will be approximately $13.1 million in 2019, $12.8 million in 2020, $12.7 million in 2021, $12.5 million in 2022 and $12.2 million in 2023. 

As a result of its annual goodwill impairment testing in the fourth quarter of 2018, the Company determined that the carrying value of the Allen Edmonds reporting unit exceeded its fair value and recorded $38.0 million in impairment charges. The Company recorded no goodwill impairment charges in the thirteen or thirty-nine weeks ended November 2, 2019.

Indefinite-lived intangible assets are tested for impairment as of the first day of the fourth quarter of each fiscal year unless events or circumstances indicate an interim test is required.  The indefinite-lived intangible asset impairment review in the fourth quarter of 2018 resulted in $60.0 million in impairment charges associated with the Allen Edmonds trademark.  The Company recorded no impairment charges in the thirteen or thirty-nine weeks ended November 2, 2019.