Annual report pursuant to Section 13 and 15(d)

Divestitures (Notes)

v3.6.0.2
Divestitures (Notes)
 12 Months Ended
Dec. 31, 2016
Divestitures [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
DIVESTITURES
On September 8, 2016, HSNi completed the sale of substantially all of the assets and certain liabilities of Chasing Fireflies and TravelSmith, two of the apparel brands included within the Cornerstone segment.  The sale price included $1 million in cash and $2 million of contingent consideration that was based on the achievement of certain performance metrics in 2016 which are not expected to be achieved. During the year ended December 31, 2016, Cornerstone recorded a pre-tax loss on sale of $10.8 million. The transaction included cash charges of approximately $3.5 million related to transactions costs and employee and lease liabilities.
The assets and liabilities of the two brands were classified as held for sale as of June 30, 2016 which resulted in a non-cash asset impairment charge of $20.4 million recorded in the second quarter of 2016 within the Cornerstone segment and was included in "Loss on sale of businesses and asset impairments" expense in the accompanying consolidated statements of operations.

The loss on sale and asset impairment charges related to this sale are recorded in the consolidated statements of operations in the line item “Loss on sale of businesses and asset impairments.”   The assets sold were largely represented by $29.3 million of inventory and $8.4 million of other assets, and approximately $8.6 million of current liabilities.

HSNi entered into a transition services agreement with the buyer to provide fulfillment services and various back office support services through February 2017. Charges by HSNi under this transition services agreement of approximately $4.7 million for the year ended December 31, 2016 are recorded in net sales in the consolidated statements of operations.
 
HSNi determined the sale of these businesses would not represent a strategic shift in its business nor will it have a major effect on its consolidated results of operations, financial position or cash flows. Accordingly, the disposal group is not presented in the consolidated financial statements as a discontinued operation.