Acquisition of Shoe Station

12 Months Ended

Jan. 28, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition of Shoe Station

Note 3 – Acquisition of Shoe Station

On December 3, 2021, we acquired the physical stores and substantially all of the other assets of Shoe Station for total consideration of $70.3 million, net of $77,000 of cash acquired. The purchase price paid was funded with available cash on hand. As of our Fiscal 2022 year end, we operated 24 stores across five states in the Southeast under the Shoe Station banner, inclusive of the 21 stores acquired and three additional stores opened since the acquisition. The addition of a new brand and new retail locations to the Shoe Carnival portfolio has created a complementary retail platform for us to serve a broader base of family footwear customers in both urban and suburban demographics.

The results of Shoe Station are included in our consolidated financial statements since the acquisition date. Net Sales attributed to the Shoe Station banner were $99.9 million in Fiscal 2022 and $16.6 million from the acquisition date through January 29, 2022. Acquisition-related costs of $3.2 million were expensed as incurred and are included in Selling, General and Administrative Expenses in our Consolidated Statements of Income in Fiscal 2021.

The following table summarizes the final allocation of the purchase price to the fair value of the assets acquired and liabilities assumed and reflects minor adjustments to the preliminary purchase price allocation as of January 29, 2022. The excess purchase price over the fair value of net assets acquired was allocated to Goodwill. The purchase price allocation was considered complete as of December 3, 2022.

(In thousands)
Fair value of identifiable assets and liabilities:
Merchandise inventories	$	27,708
Other assets		3,404
Property and equipment, net		6,045
Operating lease ROU assets		14,620
Shoe Station trade names		32,600
Goodwill		12,023
Total assets	$	96,400
Accounts payable		6,104
Operating lease liabilities		18,235
Accrued and other liabilities		1,761
Total liabilities	$	26,100
Purchase Price:
Total consideration, net of cash acquired	$	70,300

We are treating Shoe Station trade names as indefinite-lived Intangible Assets; therefore, Goodwill and the Shoe Station trade names are charged to expense only if impaired. Goodwill and the indefinite-lived Intangible Assets are expected to be fully deductible for tax purposes over 15 years.