FAIR VALUE MEASUREMENT |
12 Months Ended |
|---|---|
Feb. 01, 2025 | |
| Fair Value Disclosures [Abstract] | |
| FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT FASB ASC 820—Fair Value Measurement provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. This topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows: •Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities •Level 2 - inputs to the valuation techniques that are other than quoted prices, but are observable for the assets or liabilities, either directly or indirectly •Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities The Company’s cash and cash equivalents and investments in the rabbi trust are short-term in nature. As such, their carrying amounts approximate fair value. These assets and liabilities fall within Level 1 of the fair value hierarchy. The Company stock included in the Deferred Compensation Plan is not subject to fair value measurement. The fair value of the Initial Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $78.6 million at February 1, 2025, was approximately $60.2 million. The fair value of the New Mithaq Term Loan with a carrying value (gross of debt issuance costs) of $90.0 million at February 1, 2025, was approximately $80.8 million. The fair value of debt was estimated using a market approach, which considers the Company’s credit risk and market related conditions, and is therefore within Level 2 of the fair value hierarchy. The Company’s non-financial assets measured at fair value on a nonrecurring basis include long-lived assets, such as intangible assets, fixed assets, and ROU assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to fall within Level 3 of the fair value hierarchy. Impairment of Long-Lived Assets The fair value of the Company’s long-lived assets is primarily calculated using a discounted cash-flow model directly associated with those assets, which consist principally of property and equipment and ROU assets. These assets are tested for impairment when events indicate that their carrying value may not be recoverable. The Company performed periodic quantitative impairment assessments of its long-lived assets and did not record an impairment charge in Fiscal 2024. The Company recorded impairment charges of $5.6 million and $3.3 million during Fiscal 2023 and Fiscal 2022, respectively, inclusive of ROU assets. Impairment of Indefinite-Lived Intangible Assets The Company estimates the fair value of its indefinite-lived Gymboree tradename based on an income approach using the relief-from-royalty method. Estimating fair value using this method requires management to estimate future revenues, royalty rates, discount rates, long-term growth rates, and other factors in order to project future cash flows. The Company identified an indicator of impairment in its qualitative assessment performed during Fiscal 2024, primarily due to reductions in Gymboree sales forecasts. Based on its quantitative assessment performed, the Company recorded an of $28.0 million in Fiscal 2024, which reduced the carrying value to its fair value of $13.0 million. The Company recorded a $29.0 million impairment charge recorded in Fiscal 2023 and there was no impairment charge in Fiscal 2022. The impairment charge was recorded in The Children’s Place U.S. segment.
|