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| SEGMENTS | NOTE 10 – SEGMENTS The Company’s reportable segments are business units that offer products through different channels of distribution. The Company has two reportable segments: wholesale operations and retail operations. The wholesale operations segment includes sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Karl Lagerfeld and Vilebrequin businesses, including from retail stores operated by Karl Lagerfeld and Vilebrequin, other than sales of product under the Karl Lagerfeld Paris brand generated by the Company’s retail stores and digital platforms. Wholesale revenues also include revenues from license agreements related to trademarks associated with the Company’s owned brands. The retail operations segment consists primarily of direct sales to consumers through company-operated stores, which consists primarily of DKNY and Karl Lagerfeld Paris stores, as well as the digital channels for DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass and Wilsons Leather. Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores. The Company determines its operating segments based on how the chief operating decision maker (“CODM”) views and analyzes each segment’s operations and performance. The Company’s CODM is its Chief Executive Officer. The CODM utilizes operating profit or loss as the measure of segment profit or loss. The CODM uses operating profit or loss to determine resource allocation and operational decisions for matters including, but not limited to, compensation, advertising and facilities needs. All historical financial segment information has been recast to conform to the new disclosure requirements under Accounting Standard Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The following segment information is presented for the three month periods indicated below:
(1)Represents intersegment sales to the Company’s retail operations segment. (2)Other segment items include design and product development costs, professional fees, office expenses, freight and packaging and other selling, general and administrative expenses. The total net sales by licensed and proprietary product sales for each of the Company’s reportable segments are as follows:
The Company allocates overhead to its business segments on various bases, which include units shipped, space utilization, inventory levels and relative sales levels, among other factors. The method of allocation has been applied consistently on a period-to-period basis. The total assets for each of the Company’s reportable segments, as well as assets not allocated to a segment, are as follows:
Capital expenditures during the three months ended April 30, 2025 for the wholesale operations segment and retail operations segment were $2.3 million and $1.0 million, respectively.
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