A big increase in debt…

April 22, 2004

Williams-Sonoma, (WSM) disclosed last week that its long-term debt increased by more than 50% now that it has moved two distribution centers in Memphis, TN back onto its balance sheet. In both the 10-K and the proxy, the company disclosed that it had consolidated the two distribution centers which are owned by partnerships comprised of Williams-Sonoma Chairman W. Howard Lester and former director James McMahan. The company has operating leases for the 2 faciliites, which together are just over 1 million square feet. One of those leases dates back to 1983, though Williams-Sonoma only began disclosing relatively recently that its Chairman was one of the partners. The most recent balance sheet shows an increase in long-term debt from $18.1 million at the end of the 2003 fiscal year to $28.4 million as of February 2004. Of course, Williams-Sonoma is hardly the only one impacted by the FASB rule requiring companies to reveal these formerly secret deals. With first quarter Qs coming out soon, expect to see a lot more disclosure in this area.

Leave a Reply

You must be logged in to post a comment.