Annual report pursuant to Section 13 and 15(d)

SEGMENTS AND GEOGRAPHIC INFORMATION

v3.20.1
SEGMENTS AND GEOGRAPHIC INFORMATION
12 Months Ended
Feb. 01, 2020
SEGMENTS AND GEOGRAPHIC INFORMATION  
SEGMENTS AND GEOGRAPHIC INFORMATION

12. SEGMENTS AND GEOGRAPHIC INFORMATION

In fiscal 2019, we consider Michaels-U.S., Michaels-Canada and Darice to be our operating segments for purposes of determining reportable segments based on the criteria of ASC 280, Segment Reporting (“ASC 280”). In fiscal 2018 and fiscal 2017, our operating segments also included Aaron Brothers and Pat Catan’s. We determined that Michaels-U.S., Michaels-Canada, Aaron Brothers and Pat Catan’s have similar economic characteristics and meet the aggregation criteria set forth in ASC 280. Therefore, we combine these operating segments into one reporting segment. Darice does not meet the materiality criteria in ASC 280 and, therefore, is not disclosed separately as a reportable segment. Our chief operating decision makers evaluate historical operating performance and forecast future periods’ operating performance based on operating income.

Our net sales by country and sales by product category are as follows (in thousands):

Fiscal Year

    

2019

    

2018

2017

Net Sales:

United States (1)

$

4,597,262

$

4,783,903

$

4,856,275

Canada

 

474,775

 

488,041

 

505,685

Total

$

5,072,037

$

5,271,944

$

5,361,960

Sales by Product Category:

General crafts

$

2,389,745

$

2,604,905

$

2,685,787

Home décor and seasonal

 

1,167,418

 

1,230,054

 

1,177,069

Custom and ready-made framing

 

816,869

 

801,075

 

875,944

Papercrafting

 

698,005

 

635,910

 

623,160

Total

$

5,072,037

$

5,271,944

$

5,361,960

(1) In March 2018 we closed our Aaron Brothers stores and in January 2019 we closed our Pat Catan’s stores. For fiscal 2018 and 2017, Pat Catan’s net sales totaled approximately $109.6 million and $113.4 million, respectively. For fiscal 2018 and fiscal 2017 Aaron Brothers net sales totaled approximately $12.9 million and $110.4 million, respectively. 

Our total assets by country are as follows (in thousands):

Fiscal Year

    

2019

    

2018

Total Assets:

United States (1)

$

3,527,374

$

1,949,836

Canada

 

310,721

 

178,500

Total

$

3,838,095

$

2,128,336

(1) In fiscal 2019, we wrote-off $40.1 million of assets in connection with the impairments taken on our Darice wholesale business and $2.6 million of assets in connection with the closure our Pat Catan’s stores. In fiscal 2018, we wrote-off  $97.8 million of assets in connection with the closure of our Aaron Brothers and Pat Catan’s stores.

Assets are categorized based on their geographic location. Certain assets located in the U.S. are also used to support our Canadian operations but are not allocated to Canada.