Goodwill and Intangibles

6 Months Ended

Jul. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangibles

Goodwill and intangibles

Goodwill and other indefinite-lived intangible assets, such as indefinite-lived trade names, are evaluated for impairment annually. Additionally, if events or conditions indicate the carrying value of a reporting unit or an indefinite-lived intangible asset may be greater than its fair value, the Company would evaluate the asset for impairment at that time. Impairment testing compares the carrying amount of the reporting unit or other intangible assets with its fair value. When the carrying amount of the reporting unit or other intangible assets exceeds its fair value, an impairment charge is recorded.

Fiscal 2022

During the 13 weeks ended May 1, 2021, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceed their fair values.

In connection with the acquisition of Rocksbox on March 29, 2021, the Company recognized $11.6 million of definite-lived intangible assets and $4.6 million of goodwill, which are reported in the North America reportable segment. The weighted-average amortization period of the definite-lived intangibles assets acquired is eight years.

During the 13 weeks ended July 31, 2021, the Company completed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names, and through the qualitative assessment the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceeded their fair values. Additionally, the Company completed its quarterly triggering event assessment and determined that no triggering events had occurred in the second quarter of Fiscal 2022 requiring interim impairment assessments for all reporting units with goodwill and indefinite-lived intangible assets.

In connection with the acquisition of Diamonds Direct on November 17, 2021, the Company recognized $126.0 million of indefinite-lived intangible assets related to the Diamonds Direct trade name and $243.8 million of goodwill, which are reported in the North America reportable segment. Refer to Note 4 for additional information.

Fiscal 2023

During the 13 weeks ended April 30, 2022, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceed their fair values.

During the 13 weeks ended July 30, 2022, the Company completed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names, and through the qualitative assessment the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceeded their fair values. Additionally, the Company completed its quarterly triggering event assessment and determined that no triggering events had occurred in the second quarter of Fiscal 2023 requiring interim impairment assessments for all reporting units with goodwill and indefinite-lived intangible assets.

Goodwill

The following table summarizes the Company’s goodwill by reportable segment:

(in millions)	North America
Balance at January 29, 2022 (1)	$	484.6
Acquisitions (2)	1.8
Balance at July 30, 2022 (1)	$	486.4

(1)    The carrying amount of goodwill is presented net of accumulated impairment losses of $576.0 million as of July 30, 2022 and January 29, 2022.

(2)    The change in goodwill during the period primarily represents an increase related to the finalization of the purchase price consideration of Diamonds Direct. Refer to Note 4 for additional information.

Intangibles

Definite-lived intangible assets include trade names, technology and customer relationship assets. Indefinite-lived intangible assets consist of trade names. Both definite and indefinite-lived assets are recorded within intangible assets, net, on the condensed consolidated balance sheets. Intangible liabilities, net, consists of unfavorable contracts and is recorded within accrued expenses and other current liabilities and other liabilities on the condensed consolidated balance sheets.

The following table provides additional detail regarding the composition of intangible assets and liabilities:

	July 30, 2022						January 29, 2022						July 31, 2021
(in millions)	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Intangible assets, net:
Definite-lived intangible assets	$	15.8	$	(6.6)	$	9.2	$	15.8	$	(5.3)	$	10.5	$	17.2	$	(5.4)	$	11.8
Indefinite-lived intangible assets (1)	303.6		—		303.6		303.7		—		303.7		177.9		—		177.9
Total intangible assets, net	$	319.4	$	(6.6)	$	312.8	$	319.5	$	(5.3)	$	314.2	$	195.1	$	(5.4)	$	189.7
Intangible liabilities, net	$	(38.0)	$	31.7	$	(6.3)	$	(38.0)	$	30.8	$	(7.2)	$	(38.0)	$	30.0	$	(8.0)

(1) The change in the indefinite-lived intangible asset balances during the periods presented was due to the addition of Diamonds Direct trade name of $126.0 million and the impact of foreign currency translation.