ACQUISITIONS AND INTANGIBLES

12 Months Ended

Jan. 31, 2015

Business Combinations [Abstract]

ACQUISITIONS AND INTANGIBLES

NOTE D — ACQUISITIONS AND INTANGIBLES

   Acquisition of Vilebrequin

In August 2012, the Company acquired all of the outstanding shares of Vilebrequin for an aggregate consideration consisting of  $87.6 million in cash, $18.6 million of unsecured promissory notes and a contingent consideration of up to $27.9 million. Identifiable intangible assets acquired include trademarks valued at $58.7 million with an indefinite life, franchise agreements valued at $7.5 million with an estimated useful life of 14 years and customer relationships valued at $2.6 million with an estimated useful life of 8 years and goodwill of  $26.8 million. The goodwill represents the future economic benefits expected to arise that could not be individually identified and separately recognized, including use of the Company’s existing infrastructure to expand sales of Vilebrequin products. The dollar equivalents to the amounts in Euro set forth in this paragraph are based on the exchange rate on the date of acquisition (€1.000 equal to USD $1.242). The unsecured promissory notes were repurchased in October 2014 and the contingent consideration was adjusted to approximately $1.0 million in fiscal 2015 (See Note L – Other Income). 

Acquisition of G.H. Bass

In November, 2013, the Company entered into an asset purchase agreement, with PVH Retail Stores LLC and its affiliates, providing for the acquisition of substantially all of the assets of the G.H. Bass & Co. (“G.H. Bass”) business, including approximately 160 G.H. Bass & Co. outlet stores. The purchase price was $49.2 million in cash.

G.H. Bass is a well-known heritage brand that embodies classic American style. The Company sells G.H. Bass & Co. footwear, apparel and accessories primarily through approximately 160 outlet stores located in the United States. The Company also licenses the brand for the wholesale distribution of men’s and women’s footwear and men’s sportswear.

The following table (in thousands) summarizes the components of the purchase price allocation for the acquisition of G.H. Bass:

Purchase price:
Cash paid	$	49,236
	$	49,236
Allocation:
Current assets	$	42,967
Property, plant and equipment		2,788
Identifiable intangible assets — Trademarks		2,490
Other non-current assets, net		975
Assumed liabilities		(700	)
Goodwill		716
	$	49,236

The trademarks were assigned an indefinite useful life. Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies expected to be derived from the combination of G.H. Bass with the other businesses of the retail operations segment.

Intangible assets balances

Intangible assets consist of:

		January 31,
	Estimated Life	2015		2014
		(In thousands)
Gross carrying amounts
Licenses	14 years	$	19,819	$	20,779
Trademarks	8  –  12 years		2,194		2,194
Customer relationships	8  –  15 years		8,408		8,741
Other	3  –  10 years		4,844		2,912
Subtotal			35,265		34,626
Accumulated amortization
Licenses			13,815		13,394
Trademarks			2,036		1,816
Customer relationships			4,291		3,696
Other			1,890		1,415
Subtotal			22,032		20,321
Net
Licenses			6,004		7,385
Trademarks			158		378
Customer relationships			4,117		5,045
Other			2,954		1497
Subtotal			13,233		14,305
Unamortized intangible assets
Goodwill			52,130		55,604
Trademarks			73,097		80,707
Subtotal			125,227		136,311
Total intangible assets, net		$	138,460	$	150,616

Intangible amortization expense amounted to approximately $2.0 million, $1.6 million and $1.2 million for the years ended January 31, 2015, 2014 and 2013, respectively.

The estimated intangible amortization expense for the next five years is as follows:

Year Ending January 31,	Amortization Expense
	(In thousands)
2016	$	1,874
2017		1,831
2018		1,803
2019		1,783
2020		1,777

Goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method. The Company reviews and tests its goodwill and intangible assets with indefinite lives for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may be impaired. The Company performs the test in the fourth fiscal quarter of each year using a combination of a discounted cash flow analysis and a market approach. The discounted cash flow approach requires that certain assumptions and estimates be made regarding industry economic factors and future profitability. The market approach estimates the fair value based on comparisons with the market values and market multiples of earnings and revenues of similar public companies.

Trademarks and customer relationships having finite lives are amortized over their estimated useful lives and measured for impairment when events or circumstances indicate that the carrying value may be impaired.

Goodwill has been allocated to the reporting segments based upon the relative fair values of the licenses (licensed products segment) and trademarks acquired. For the year ended January 31, 2015, the carrying amount of goodwill was $26.1 million, $25.3 million and $716,000 in the licensed products, non-licensed products and retail operations segments, respectively, including $3.5 million in exchange differences arising during the period. For the year ended January 31, 2014, the carrying amount of goodwill was $26.1 million, $28.8 million and $716,000 in the licensed products, non-licensed products and retail operations segments, respectively, including $1.5 million in exchange differences arising during the period.