ACQUISITIONS

3 Months Ended

May 01, 2022

Business Combinations [Abstract]

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS

Australia Acquisition

The Company acquired on May 31, 2019 the approximately 78% ownership interest in Gazal Corporation Limited (“Gazal”) that it did not already own (the “Australia acquisition”).

Mandatorily Redeemable Non-Controlling Interest

Pursuant to the terms of the acquisition agreement, key executives of Gazal and PVH Brands Australia Pty. Limited (“PVH Australia”) exchanged a portion of their interests in Gazal for approximately 6% of the outstanding shares of the Company’s previously wholly owned subsidiary that acquired 100% of the ownership interests in the Australia business. The Company was obligated to purchase this 6% interest within two years of the Australia acquisition closing in two tranches: tranche 1 – 50% of the shares one year after the closing; and tranche 2 – all remaining shares two years after the closing.

The Company recognized a liability of $26.2 million for the fair value of the 6% interest on the date of the Australia acquisition, based on exchange rates in effect on that date, which was being accounted for as a mandatorily redeemable non-controlling interest. In subsequent periods, the liability for the mandatorily redeemable non-controlling interest was adjusted each reporting period to its redemption value based on conditions that existed as of each subsequent balance sheet date, provided that the liability could not be adjusted below the amount initially recorded at the acquisition date. The Company recorded any such adjustments to the liability in interest expense in the Company’s Consolidated Statements of Operations.

For the tranche 1 shares, the measurement period ended in 2019. The Company paid the management shareholders an aggregate purchase price of $17.3 million (based on exchange rates in effect on the payment date) for these shares in June 2020 under the conditions specified in the terms of the acquisition agreement. For the tranche 2 shares, the measurement period ended in 2020 and the Company had accrued a $24.5 million liability for these shares in the Company’s Consolidated Balance Sheet as of May 2, 2021 (based on exchange rates in effect on that date), which was subsequently paid to the management shareholders in June 2021 under the conditions specified in the terms of the acquisition agreement. The Company had no remaining liability for the mandatorily redeemable non-controlling interest as of May 1, 2022 and January 30, 2022.