GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Aug. 01, 2021

Notes to Financial Statements [Abstract]

The changes in the carrying amount of goodwill for the twenty-six weeks ended August 1, 2021, by segment (please see Note 20, “Segment Data,” for further discussion of the Company’s reportable segments), were as follows:


(In millions)	Calvin Klein North America		Calvin Klein International		Tommy Hilfiger North America		Tommy Hilfiger International		Heritage Brands Wholesale		Heritage Brands Retail		Total
Balance as of January 31, 2021
Goodwill, gross	$	781.8	$	902.8	$	203.0	$	1,748.0	$	197.7	$	11.9	$	3,845.2
Accumulated impairment losses	(287.3)		(394.0)		—		—		(197.7)		(11.9)		(890.9)
Goodwill, net	494.5		508.8		203.0		1,748.0		—		—		2,954.3
Reclassification of goodwill, gross to assets held for sale	—		—		—		—		(92.7)		—		(92.7)
Reclassification of accumulated impairment losses to assets held for sale	—		—		—		—		92.7		—		92.7
Currency translation	0.2		(3.2)		—		(31.1)		—		—		(34.1)
Balance as of August 1, 2021
Goodwill, gross	782.0		899.6		203.0		1,716.9		105.0		11.9		3,718.4
Accumulated impairment losses	(287.3)		(394.0)		—		—		(105.0)		(11.9)		(798.2)
Goodwill, net	$	494.7	$	505.6	$	203.0	$	1,716.9	$	—	$	—	$	2,920.2

The Company reclassified $92.7 million of goodwill, gross and a corresponding $92.7 million of accumulated impairment losses, recorded as a result of the interim goodwill impairment test performed during the first quarter of 2020 discussed below, to assets held for sale in the Company's Consolidated Balance Sheet as of August 1, 2021 in connection with the Heritage Brands transaction. The Company also reclassified $66.9 million of tradenames to assets held for sale in the Company's Consolidated Balance Sheet as of August 1, 2021 in connection with the transaction. Please see Note 5, “Assets Held For Sale,” for further discussion.

The Company assesses the recoverability of goodwill and other indefinite-lived intangible assets annually, at the beginning of the third quarter of each fiscal year, and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the carrying amount may be impaired. Impairment testing for goodwill is done at the reporting unit level. Impairment testing for other indefinite-lived intangible assets is done at the individual asset level. Intangible assets with finite lives are amortized over their estimated useful life and are tested for impairment, along with other long-lived assets, when events and circumstances indicate that the assets might be impaired. Indefinite-lived intangible assets and intangible assets with finite lives are tested for impairment prior to assessing the recoverability of goodwill. Please see Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for discussion of the Company’s goodwill and other intangible assets impairment testing process.

The Company determined in the first quarter of 2020 that the significant adverse impact of the COVID-19 pandemic on the Company’s business, including an unprecedented material decline in revenue and earnings and an extended decline in the Company’s stock price and associated market capitalization, was a triggering event that required the Company to perform a quantitative interim goodwill impairment test. As a result of the interim test performed, the Company recorded $879.0 million of noncash impairment charges in the first quarter of 2020, which were included in goodwill and other intangible asset impairments in the Company’s Consolidated Statement of Operations and allocated to the Company’s segments as follows:

$197.7 million in the Heritage Brands Wholesale segment, $287.3 million in the Calvin Klein North America segment, and $394.0 million in the Calvin Klein International segment. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of these impairment charges. The Company recorded no further impairments of goodwill in 2020.

The Company also determined in the first quarter of 2020 that the impact of the COVID-19 pandemic on its business was a triggering event that prompted the need to perform interim impairment testing of its intangible assets. As a result of the interim test performed, the Company recorded $47.2 million of noncash impairment charges related to indefinite-lived intangible assets and $7.3 million of noncash impairment charges related to finite-lived intangible assets in the first quarter of 2020, which were included in goodwill and other intangible asset impairments in the Company’s Consolidated Statement of Operations and allocated to the Company’s segments as follows: $51.9 million in the Heritage Brands Wholesale segment and $2.6 million in the Calvin Klein North America segment. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of these impairment charges. The Company recorded no further impairments of indefinite-lived intangible assets or finite-lived intangible assets in 2020.

There have been no significant events or change in circumstances during the twenty-six weeks ended August 1, 2021 that would indicate the remaining carrying amount of the Company’s goodwill, indefinite-lived intangible assets and intangible assets with finite lives may be impaired as of August 1, 2021. There continues to be uncertainty about the impacts of the COVID-19 pandemic on the Company’s business. If economic conditions caused by the pandemic do not recover as currently estimated by management or market factors utilized in the impairment analysis deteriorate, the Company could incur additional goodwill and other intangible asset impairment charges in the future.