SEGMENTS

9 Months Ended

Oct. 31, 2023

SEGMENTS [Abstract]

SEGMENTS

NOTE 10 – SEGMENTS

The Company’s reportable segments are business units that offer products through different channels of distribution. The Company has two reportable segments: wholesale operations and retail operations. The wholesale operations segment includes sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Vilebrequin and Karl Lagerfeld businesses, including from retail stores operated by Vilebrequin and Karl Lagerfeld, other than sales of product under the Karl Lagerfeld Paris brand generated by the Company’s retail stores and digital outlets. Wholesale revenues also include revenues from license agreements related to the DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H. Bass, Andrew Marc and Sonia Rykiel trademarks owned by the Company. The retail operations segment consists primarily of direct sales to consumers through Company-operated stores, which consists primarily of DKNY and Karl Lagerfeld Paris stores, as well as the digital channels for DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass and Wilsons Leather. Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores.

The following segment information is presented for the three and nine month periods indicated below:

	Three Months Ended October 31, 2023
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	1,054,303	$	32,711	$	(19,904)	$	1,067,110
Cost of goods sold		636,961		16,640		(19,904)		633,697
Gross profit		417,342		16,071		—		433,413
Selling, general and administrative expenses		213,263		23,045		—		236,308
Depreciation and amortization		5,475		1,120		—		6,595
Asset impairments and gain on lease terminations		222		—		—		222
Operating profit (loss)	$	198,382	$	(8,094)	$	—	$	190,288

	Three Months Ended October 31, 2022
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	1,069,574	$	28,762	$	(20,037)	$	1,078,299
Cost of goods sold		740,734		12,975		(20,037)		733,672
Gross profit		328,840		15,787		—		344,627
Selling, general and administrative expenses		216,916		22,977		—		239,893
Depreciation and amortization		6,224		1,046		—		7,270
Asset impairment, net of gain on lease terminations		250		—		—		250
Operating profit (loss)	$	105,450	$	(8,236)	$	—	$	97,214

	Nine Months Ended October 31, 2023
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	2,280,391	$	97,268	$	(44,199)	$	2,333,460
Cost of goods sold		1,369,315		48,478		(44,199)		1,373,594
Gross profit		911,076		48,790		—		959,866
Selling, general and administrative expenses		633,841		69,635		—		703,476
Depreciation and amortization		16,247		2,883		—		19,130
Asset impairment, net of gain on lease terminations		222		—		—		222
Operating profit (loss)	$	260,766	$	(23,728)	$	—	$	237,038

	Nine Months Ended October 31, 2022
	Wholesale		Retail		Elimination (1)		Total
	(In thousands)
Net sales	$	2,338,435	$	87,758	$	(53,893)	$	2,372,300
Cost of goods sold		1,564,595		42,006		(53,893)		1,552,708
Gross profit		773,840		45,752		—		819,592
Selling, general and administrative expenses		548,411		67,940		—		616,351
Depreciation and amortization		17,304		2,717		—		20,021
Asset impairment, net of gain on lease terminations		250		(38)		—		212
Operating profit (loss)	$	207,875	$	(24,867)	$	—	$	183,008

(1)Represents intersegment sales to the Company’s retail operations segment.

The total net sales by licensed and proprietary product sales for each of the Company’s reportable segments are as follows:

	Three Months Ended				Nine Months Ended
	October 31, 2023		October 31, 2022		October 31, 2023		October 31, 2022
	(In thousands)
Licensed brands	$	625,231	$	669,408	$	1,261,894	$	1,403,142
Proprietary brands		429,072		400,166		1,018,497		935,293
Wholesale net sales(1)	$	1,054,303	$	1,069,574	$	2,280,391	$	2,338,435
Licensed brands	$	—	$	—	$	—	$	—
Proprietary brands		32,711		28,762		97,268		87,758
Retail net sales	$	32,711	$	28,762	$	97,268	$	87,758

(1) As of May 31, 2022, the Company acquired the remaining interests in KLH (Karl Lagerfeld branded product) that it did not already own. Net sales of Karl Lagerfeld product were included in licensed brands net sales of the wholesale operations segment through May 31, 2022. Subsequent to May 31, 2022, net sales of Karl Lagerfeld product are included in proprietary brands net sales of the wholesale operations segment.