Note 11 - Goodwill and Intangible Assets

12 Months Ended

Feb. 01, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

11.    GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets were as follows:

($ thousands)	February 1, 2020			February 2, 2019
Intangible Assets
Famous Footwear	$	2,800		$	2,800
Brand Portfolio		388,288			388,288
Total intangible assets		391,088			391,088
Accumulated amortization		(96,784	)		(83,722	)
Total intangible assets, net		294,304			307,366
Goodwill
Brand Portfolio		245,275			242,531
Total goodwill		245,275			242,531
Goodwill and intangible assets, net	$	539,579		$	549,897

As further described in Note 2 to the 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.  The trademark is being amortized on a straight-line basis over its useful life of 20 years.  The customer relationship intangible is being amortized on an accelerated basis over its estimated useful life of approximately 16 years.  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 trademark is being amortized on a straight-line basis over its useful life of 20 years and the customer relationship intangible is being amortized on an accelerated basis over its estimated useful life of approximately 15 years.

The Company's intangible assets as of February 1, 2020 and February 2, 2019 were as follows:

($ thousands)	February 1, 2020
	Estimated Useful Lives (In Years)		Cost Basis		Accumulated Amortization		Net Carrying Value
Trademarks		15 - 40	$	288,788	$	91,827	$	196,961
Trademarks	Indefinite			58,100		—		58,100
Customer relationships		15 - 16		44,200		4,957		39,243
			$	391,088	$	96,784	$	294,304

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

Amortization expense related to intangible assets was $13.1 million in 2019, $7.0 million in 2018 and $4.1 million in 2017.  The Company estimates $12.8 million of amortization expense related to intangible assets in 2020, $12.7 million in 2021, $12.5 million in 2022, $12.2 million in 2023 and $11.4 million in 2024.

Goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate it might be impaired, using either the qualitative assessment or a quantitative fair value-based test, as further discussed in Note 1 to the consolidated financial statements.  As a result of its annual goodwill impairment testing, the Company did not record any impairment charges during 2019 or 2017.  The Company recorded $38.0 million in impairment charges during 2018 associated with the Allen Edmonds reporting unit, which were reflected within the Brand Portfolio segment.  

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 reviews resulted in no impairment charges in 2019 or 2017.  The indefinite-lived intangible asset test performed as of the first day of the fourth quarter of 2018 resulted in $60.0 million in impairment charges associated with the Allen Edmonds trademark, which were reflected within the Brand Portfolio segment.