Price | 24.69 | EPS | 3 | |
Shares | 49 | P/E | 8 | |
MCap | 1,211 | P/FCF | -6 | |
Net Debt | 619 | EBIT | 191 | |
TEV | 1,830 | TEV/EBIT | 10 | TTM 2019-10-31, in MM, except price, ratios |
10-Q | 2020-07-31 | Filed 2020-09-09 |
10-Q | 2020-04-30 | Filed 2020-06-09 |
10-K | 2020-01-31 | Filed 2020-03-30 |
10-Q | 2019-10-31 | Filed 2019-12-06 |
10-Q | 2019-07-31 | Filed 2019-09-06 |
10-Q | 2019-04-30 | Filed 2019-06-10 |
10-K | 2019-01-31 | Filed 2019-03-28 |
10-Q | 2018-10-31 | Filed 2018-12-06 |
10-Q | 2018-07-31 | Filed 2018-09-06 |
10-Q | 2018-04-30 | Filed 2018-06-11 |
10-K | 2018-01-31 | Filed 2018-04-02 |
10-Q | 2017-10-31 | Filed 2017-12-08 |
10-Q | 2017-07-31 | Filed 2017-09-08 |
10-Q | 2017-04-30 | Filed 2017-06-09 |
10-K | 2017-01-31 | Filed 2017-04-03 |
10-Q | 2016-10-31 | Filed 2016-12-06 |
10-Q | 2016-07-31 | Filed 2016-09-01 |
10-Q | 2016-04-30 | Filed 2016-06-02 |
10-K | 2016-01-31 | Filed 2016-03-29 |
10-Q | 2015-10-31 | Filed 2015-12-04 |
10-Q | 2015-07-31 | Filed 2015-09-03 |
10-Q | 2015-04-30 | Filed 2015-06-05 |
10-K | 2015-01-31 | Filed 2015-03-30 |
10-Q | 2014-10-31 | Filed 2014-12-09 |
10-Q | 2014-07-31 | Filed 2014-09-08 |
10-Q | 2014-04-30 | Filed 2014-06-05 |
10-K | 2014-01-31 | Filed 2014-03-31 |
10-Q | 2013-10-31 | Filed 2013-12-09 |
10-Q | 2013-07-31 | Filed 2013-09-09 |
10-Q | 2013-04-30 | Filed 2013-06-10 |
10-K | 2013-01-31 | Filed 2013-04-12 |
10-Q | 2012-10-31 | Filed 2012-12-10 |
10-Q | 2012-07-31 | Filed 2012-09-10 |
10-Q | 2012-04-30 | Filed 2012-06-07 |
10-K | 2012-01-31 | Filed 2012-04-11 |
10-Q | 2011-10-31 | Filed 2011-12-09 |
10-Q | 2011-07-31 | Filed 2011-09-08 |
10-Q | 2011-04-30 | Filed 2011-06-09 |
10-K | 2011-01-31 | Filed 2011-04-14 |
10-Q | 2010-10-31 | Filed 2010-12-10 |
10-Q | 2010-07-31 | Filed 2010-09-09 |
10-Q | 2010-04-30 | Filed 2010-06-07 |
10-K | 2010-01-31 | Filed 2010-04-15 |
8-K | 2020-09-24 | Officers, Other Events, Exhibits |
8-K | 2020-09-09 | Earnings, Exhibits |
8-K | 2020-08-07 | Enter Agreement, Off-BS Arrangement, Exhibits |
8-K | 2020-07-30 | Other Events, Exhibits |
8-K | 2020-07-28 | Regulation FD, Other Events, Exhibits |
8-K | 2020-06-11 | |
8-K | 2020-06-04 | |
8-K | 2020-03-31 | |
8-K | 2020-03-24 | |
8-K | 2020-03-19 | |
8-K | 2019-12-04 | |
8-K | 2019-09-05 | |
8-K | 2019-06-13 | |
8-K | 2019-06-05 | |
8-K | 2019-04-17 | |
8-K | 2019-03-21 | |
8-K | 2018-12-06 | |
8-K | 2018-09-06 | |
8-K | 2018-06-14 | |
8-K | 2018-06-05 | |
8-K | 2018-06-05 | |
8-K | 2018-04-26 | |
8-K | 2018-03-22 |
Part I - Financial Information |
Item 1. Financial Statements. |
Note 1 - Basis of Presentation |
Note 2 - Retail Restructuring |
Note 3 - Allowance for Doubtful Accounts |
Note 4 - Inventories |
Note 5 - Fair Value of Financial Instruments |
Note 6 - Leases |
Note 7 - Goodwill and Intangible Assets |
Note 8 - Net Income (Loss) per Common Share |
Note 9 - Notes Payable |
Note 10 - Revenue Recognition |
Note 11 - Segments |
Note 12 - Stockholders' Equity |
Note 13 - Income Taxes |
Note 14 - Canadian Customs Duty Examination |
Note 15 - Recent Adopted and Issued Accounting Pronouncements |
Note 16 - Subsequent Events |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. |
Item 3. Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. Controls and Procedures. |
Part II - Other Information |
Item 1A. Risk Factors. |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
Item 6. Exhibits. |
EX-31.1 | giii-20200731xex31d1.htm |
EX-31.2 | giii-20200731xex31d2.htm |
EX-32.1 | giii-20200731xex32d1.htm |
EX-32.2 | giii-20200731xex32d2.htm |
Balance Sheet | Income Statement | Cash Flow |
---|---|---|
Assets, Equity
|
Rev, G Profit, Net Income
|
Ops, Inv, Fin
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
.
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of |
| (I.R.S. Employer |
incorporation or organization) |
| Identification No.) |
|
|
|
| ||
(Address of principal executive offices) |
| (Zip Code) |
(
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of September 4, 2020, there were
TABLE OF CONTENTS
| Page No. | ||
Condensed Consolidated Balance Sheets – July 31, 2020, July 31, 2019 and January 31, 2020 | 3 | ||
4 | |||
5 | |||
6 | |||
7 | |||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 | ||
35 | |||
35 | |||
36 | |||
60 | |||
61 |
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
July 31, | July 31, | January 31, | |||||||
2020 | 2019 | 2020 | |||||||
| (Unaudited) |
| (Unaudited) |
| |||||
(In thousands, except per share amounts) | |||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | | $ | | $ | | |||
Accounts receivable, net of allowance for doubtful accounts of $ | | | | ||||||
Inventories | | | | ||||||
Prepaid income taxes | | | | ||||||
Prepaid expenses and other current assets | | | | ||||||
Total current assets | | | | ||||||
Investments in unconsolidated affiliates | | | | ||||||
Property and equipment, net | | | | ||||||
Operating lease assets | | | | ||||||
Other assets, net | | | | ||||||
Other intangibles, net | | | | ||||||
Deferred income tax assets, net | | | | ||||||
Trademarks | | | | ||||||
Goodwill | | | | ||||||
Total assets | $ | | $ | | $ | | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities | |||||||||
Current portion of notes payable | $ | | $ | | $ | | |||
Accounts payable | | | | ||||||
Accrued expenses | | | | ||||||
Customer refund liabilities | | | | ||||||
Current operating lease liabilities | | | | ||||||
Income tax payable | | | | ||||||
Other current liabilities | | | | ||||||
Total current liabilities | | | | ||||||
Notes payable, net of discount and unamortized issuance costs | | | | ||||||
Deferred income tax liabilities, net | | | | ||||||
Noncurrent operating lease liabilities | | | | ||||||
Other noncurrent liabilities | | | | ||||||
Total liabilities | | | | ||||||
Stockholders' Equity | |||||||||
Preferred stock; | |||||||||
Common stock - $ | | | | ||||||
Additional paid-in capital | | | | ||||||
Accumulated other comprehensive loss | ( | ( | ( | ||||||
Retained earnings | | | | ||||||
Common stock held in treasury, at cost - | ( | ( | ( | ||||||
Total stockholders' equity | | | | ||||||
Total liabilities and stockholders' equity | $ | | $ | | $ | |
The accompanying notes are an integral part of these statements.
3
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | |||||
(Unaudited) | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Net sales | $ | | $ | | $ | | $ | | ||||
Cost of goods sold | | | | | ||||||||
Gross profit | | | | | ||||||||
Selling, general and administrative expenses | | | | | ||||||||
Depreciation and amortization | | | | | ||||||||
Asset impairments, net of gain on lease modifications | | ( | | ( | ||||||||
Operating profit (loss) | ( | | ( | | ||||||||
Other income (loss) | | ( | ( | ( | ||||||||
Interest and financing charges, net | ( | ( | ( | ( | ||||||||
Income (loss) before income taxes | ( | | ( | | ||||||||
Income tax expense (benefit) | ( | | ( | | ||||||||
Net income (loss) | $ | ( | $ | | $ | ( | $ | | ||||
NET INCOME (LOSS) PER COMMON SHARE: | ||||||||||||
Basic: | ||||||||||||
Net income (loss) per common share | $ | ( | $ | | $ | ( | $ | | ||||
Weighted average number of shares outstanding | | | | | ||||||||
Diluted: | ||||||||||||
Net income (loss) per common share | $ | ( | $ | | $ | ( | $ | | ||||
Weighted average number of shares outstanding | | | | | ||||||||
Net income (loss) | $ | ( | $ | | $ | ( | $ | | ||||
Other comprehensive income: | ||||||||||||
Foreign currency translation adjustments | | | ( | ( | ||||||||
Other comprehensive income (loss) | | | ( | ( | ||||||||
Comprehensive income (loss) | $ | ( | $ | | $ | ( | $ | |
The accompanying notes are an integral part of these statements.
4
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Accumulated | Common | |||||||||||||||||
Additional | Other | Stock | ||||||||||||||||
Common | Paid-In | Comprehensive | Retained | Held In | ||||||||||||||
| Stock |
| Capital |
| Loss |
| Earnings |
| Treasury |
| Total | |||||||
(Unaudited) | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
Balance as of April 30, 2020 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Equity awards exercised/vested, net | — | ( | — | — | | | ||||||||||||
Share-based compensation expense | — | | — | — | — | | ||||||||||||
Taxes paid for net share settlements | — | ( | — | — | — | ( | ||||||||||||
Other comprehensive income, net | — | — | | — | — | | ||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||
Balance as of July 31, 2020 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Balance as of April 30, 2019 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Equity awards exercised/vested, net | — | ( | — | — | | | ||||||||||||
Share-based compensation expense | — | | — | — | — | | ||||||||||||
Taxes paid for net share settlements | — | ( | — | — | — | ( | ||||||||||||
Other comprehensive income, net | — | — | | — | — | | ||||||||||||
Repurchases of common stock | — | — | — | — | ( | ( | ||||||||||||
Net income | — | — | — | | — | | ||||||||||||
Balance as of July 31, 2019 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Balance as of January 31, 2020 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Equity awards exercised/vested, net | — | ( | — | — | | | ||||||||||||
Share-based compensation expense | — | | — | — | — | | ||||||||||||
Taxes paid for net share settlements | — | ( | — | — | — | ( | ||||||||||||
Other comprehensive loss, net | — | — | ( | — | — | ( | ||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||
Balance as of July 31, 2020 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Balance as of January 31, 2019 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Equity awards exercised/vested, net | — | ( | — | — | | | ||||||||||||
Share-based compensation expense | — | | — | — | — | | ||||||||||||
Taxes paid for net share settlements | — | ( | — | — | — | ( | ||||||||||||
Other comprehensive loss, net | — | — | ( | — | — | ( | ||||||||||||
Repurchases of common stock | — | — | — | — | ( | ( | ||||||||||||
Cumulative effect of adoption of ASC 842 | — | — | — | ( | — | ( | ||||||||||||
Net income | — | — | — | | — | | ||||||||||||
Balance as of July 31, 2019 | $ | | $ | | $ | ( | $ | | $ | ( | $ | |
The accompanying notes are an integral part of these statements.
5
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended July 31, | ||||||
| 2020 |
| 2019 | |||
(Unaudited) | ||||||
(In thousands) | ||||||
Cash flows from operating activities | ||||||
Net income (loss) | $ | ( | $ | | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||
Depreciation and amortization | | | ||||
Loss on disposal of fixed assets | | | ||||
Non-cash operating lease costs | | | ||||
Gain on lease modifications | ( | ( | ||||
Asset impairments | | — | ||||
Dividend received from unconsolidated affiliate | | | ||||
Equity (gain) loss in unconsolidated affiliates | | ( | ||||
Share-based compensation | | | ||||
Deferred financing charges and debt discount amortization | | | ||||
Deferred income taxes | ( | — | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable, net | | | ||||
Inventories | ( | ( | ||||
Income taxes, net | ( | ( | ||||
Prepaid expenses and other current assets | | | ||||
Other assets, net | ( | ( | ||||
Customer refund liabilities | ( | ( | ||||
Operating lease liabilities | ( | ( | ||||
Accounts payable, accrued expenses and other liabilities | ( | | ||||
Net cash provided by (used in) operating activities | | ( | ||||
Cash flows from investing activities | ||||||
Operating lease assets initial direct costs | ( | ( | ||||
Capital expenditures | ( | ( | ||||
Net cash used in investing activities | ( | ( | ||||
Cash flows from financing activities | ||||||
Repayment of borrowings - revolving facility | ( | ( | ||||
Proceeds from borrowings - revolving facility | | | ||||
Repayment of borrowings - unsecured term loan | — | ( | ||||
Proceeds from borrowings - unsecured term loan | | | ||||
Proceeds from exercise of equity awards | | | ||||
Purchase of treasury shares | — | ( | ||||
Taxes paid for net share settlements | ( | ( | ||||
Net cash provided by financing activities | | | ||||
Foreign currency translation adjustments | | | ||||
Net increase (decrease) in cash and cash equivalents | | ( | ||||
Cash and cash equivalents at beginning of period | | | ||||
Cash and cash equivalents at end of period | $ | | $ | | ||
Supplemental disclosures of cash flow information | ||||||
Cash payments: | ||||||
Interest, net | $ | | $ | | ||
Income tax payments, net | $ | | $ | |
The accompanying notes are an integral part of these statements.
6
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Basis of Presentation
As used in these financial statements, the term “Company” or “G-III” refers to G-III Apparel Group, Ltd. and its subsidiaries. The Company designs, sources and markets an extensive range of apparel, including outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear, as well as women’s handbags, footwear, small leather goods, cold weather accessories and luggage. The Company also operates retail stores and licenses its proprietary brands for several product categories.
The Company consolidates the accounts of its wholly-owned and majority-owned subsidiaries. KL North America B.V. (“KLNA”) and Fabco Holding B.V. (“Fabco”) are Dutch joint venture limited liability companies that are
Vilebrequin International SA (“Vilebrequin”), a Swiss corporation that is wholly-owned by the Company, KLH, KLNA and Fabco report results on a calendar year basis rather than on the January 31 fiscal year basis used by the Company. Accordingly, the results of Vilebrequin, KLH, KLNA and Fabco are, and will be, included in the financial statements for the quarter ended or ending closest to the Company’s fiscal quarter end. For example, with respect to the Company’s results for the six-month period ended July 31, 2020, the results of Vilebrequin, KLH, KLNA and Fabco are included for the six-month period ended June 30, 2020. The Company’s retail operations segment reports on a 52/53-week fiscal year. The Company’s three and six-month periods ended July 31, 2020 and 2019 were each 13-week and 26-week periods, respectively, for the retail operations segment. For fiscal 2021 and 2020, the three and six-month periods for the retail operations segment ended on August 1, 2020 and August 3, 2019, respectively.
The results for the three and six months ended July 31, 2020 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business and the significant effects of the COVID-19 pandemic on the Company’s business. The accompanying financial statements included herein are unaudited. All adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim period presented have been reflected.
The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 filed with the Securities and Exchange Commission (the “SEC”).
Assets and liabilities of the Company’s foreign operations, where the functional currency is not the U.S. dollar (reporting currency), are translated from foreign currency into U.S. dollars at period-end rates, while income and expenses are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive loss within stockholders’ equity.
Accounting Policies
On April 10, 2020, the Financial Accounting Standards Board (“FASB”) issued a Staff Q&A to respond to frequently asked questions about accounting for lease concessions related to the effects of the COVID-19 outbreak. Consequently, for lease concessions related to the effects of the COVID-19 outbreak, an entity will not have to analyze each lease to determine whether the enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance to those leases. Entities may make the elections for any lessor-provided concessions related to the effects of the outbreak (e.g., deferrals of lease payments, lease payment forgiveness, cash payments made to the lessee or reduced future lease payments) as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The Company has elected to not apply the lease modification guidance for contracts with COVID-19 related rent concessions. As of July 31, 2020, the Company has $
7
Liquidity and Impact of COVID-19
The Company relies on its cash flows generated from operations and the borrowing capacity under its credit facilities to meet the cash requirements of its business. The primary cash requirements of its business are the seasonal buildup in inventory, compensation paid to employees, payments to suppliers in the normal course of business, capital expenditures, maturities of debt and related interest payments and income tax payments. The rapid expansion of the COVID-19 pandemic resulted in a sharp decline in net sales and earnings in the first and second quarters of fiscal 2021. The Company is focused on preserving its liquidity and managing its cash flow during these unprecedented conditions. The Company has taken preemptive actions to enhance its ability to meet its short-term liquidity needs, including, but not limited to, reducing payroll costs through employee furloughs, job eliminations, salary reductions, reductions in discretionary spending, deferring certain lease payments and deferral of capital projects. In addition, the Company is closely monitoring its inventory needs and is working with its suppliers to curtail, or cancel, production of product that the Company believes will not be able to be sold in season. The Company has also been working with its suppliers and licensors to negotiate extended payment terms in order to preserve capital.
As of July 31, 2020, the Company had cash and cash equivalents of $
Note 2 – Retail Restructuring
On June 5, 2020, the Company announced the restructuring of its retail operations segment including the closing of all Wilsons Leather and G.H. Bass stores. Additionally, the Company will close its Calvin Klein Performance stores. In connection with the restructuring of the retail operations segment, the Company expects to incur an aggregate charge of approximately $
As a result of the restructuring of the Company’s retail operations, the Company recorded a charge of $
| Severance and Benefit Costs |
| Store Closing Costs |
| Total | ||||
(In thousands) | |||||||||
Balance at April 30, 2020 | $ | — | $ | — | $ | — | |||
Amounts charged to expense | | | | ||||||
Cash payments | ( | — | ( | ||||||
Balance at July 31, 2020 | $ | | $ | | $ | |
The Company has accounted for the remaining rent and termination payments under Accounting Standards Codification (“ASC”) 842 – Leases. As of July 31, 2020, the total operating lease liability related to Wilsons Leather, G.H Bass, and Calvin Klein Performance stores is $
Note 3 – Allowance for Doubtful Accounts
On February 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which had no material impact on the Company’s financial statements. The Company’s financial instruments consist of trade receivables arising from revenue transactions in the ordinary course of business. The Company considers its trade receivables to consist of two portfolio segments: wholesale and retail trade receivables. Wholesale trade receivables result from credit the Company has extended to its wholesale customers based on pre-defined criteria and are generally due within 30 to 60 days. Retail trade receivables primarily relate to amounts due from third-party credit card processors for the settlement of debit and credit card transactions and are typically collected within 3 to 5 days.
8
The Company’s accounts receivable and allowance for doubtful accounts as of July 31, 2020 were:
July 31, 2020 | |||||||||
| Wholesale |
| Retail |
| Total | ||||
(In thousands) | |||||||||
Accounts receivable, gross | $ | | $ | | $ | | |||
Allowance for doubtful accounts | ( | ( | ( | ||||||
Accounts receivable, net | $ | | $ | | $ | |
The allowance for doubtful accounts for wholesale trade receivables is estimated based on several factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligation (such as in the case of bankruptcy filings (including potential bankruptcy filings), extensive delay in payment or substantial downgrading by credit rating agencies), a specific reserve for bad debts is recorded against amounts due from that customer to reduce the net recognized receivable to the amount reasonably expected to be collected. For all other wholesale customers, an allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the end of the reporting period for financial statements, assessments of collectability based on historical trends and an evaluation of the impact of economic conditions. The Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.
The allowance for doubtful accounts for retail trade receivables is estimated as the credit card chargeback rate applied to the previous 90 days of credit card sales. In addition, the Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.
During the three and six months ended July 31, 2020, the Company recorded a $
July 31, 2020 | |||||||||
| Wholesale |
| Retail |
| Total | ||||
(In thousands) | |||||||||
Balance as of January 31, 2020 | $ | ( | $ | ( | $ | ( | |||
Provision for credit losses | ( | | ( | ||||||
Accounts written off as uncollectible | | — | | ||||||
Balance as of July 31, 2020 | $ | ( | $ | ( | $ | ( |
Note 4 – Inventories
Wholesale inventories, which comprise a significant portion of the Company’s inventory, are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Retail inventories are valued at the lower of cost or market as determined by the retail inventory method. Vilebrequin inventories are stated at the lower of cost (determined by the weighted average method) or net realizable value. Substantially all of the Company’s inventories consist of finished goods.
The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, represented $
Inventory held on consignment by the Company’s customers totaled $
9