SEC Comment Letter for WILLIAMS SONOMA INC (WSM) (CIK 0000719955) (WSM) — Aug 30, 2006
WILLIAMS SONOMA INC (WSM) (CIK 0000719955)
Date: Aug. 30, 2006 · CIK: 0000719955 · Accession: 0000000000-06-042043
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3561 August 30, 2006 Mr. Howard Lester Chief Executive Officer c/o Mr. Seth Jaffe General Counsel Williams-Sonoma, Inc. 3250 Van Ness Avenue San Francisco, CA 94109
Re: Williams-Sonoma, Inc. Form 10-K for the Fiscal Year Ended January 29, 2006 Filed April 7, 2006 Form 8-K Filed July 11, 2006 File No. 1-14077
Dear Mr. Lester:
We have reviewed your filings and have the following comments. We have limited our review to your fi nancial statements and relate d disclosures and do not intend to expand our review to other portions of your document. Please provide a written response to our comments. Please be as deta iled as necessary in your explanation. In some of our comments, we may ask you to provi de us with information so we may better understand your disclosure. After reviewing th is information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Howard Lester Williams-Sonoma, Inc. August 30, 2006 Page 2 Form 10-K for the Fiscal Year Ended January 29, 2006
Note A: Summary of Significan t Accounting Policies, page 42
General
1. In future filings, please disclose the to tal amount charged to advertising expense for each period presented. Please refer to paragraph 49(c) of SOP 93-7. Please also disclose the amount of cooperative advertising allowanc es netted against gross advertising expense charged to selling and ad ministrative expenses.
Deferred Rent and Lease Incentives, page 44
2. We note your disclosure in Note E at page 52 that the rental payment requirements in your store leases are typica lly structured as either minimum rent, minimum rent plus additional rent base d on a percentage of store sales if a specified store sales threshold is exceede d, or rent based on a percentage of store sales if a specified store sales threshold or contractual obligations of the landlord have not been met. Please expand your di sclosure in future filings to describe your accounting treatment of any contingent rental amounts included in these lease agreements. Specifically, your di sclosure should explain whether you include an estimate of contingent rent wh en calculating your deferred rent liability as well as the factors that you consider when determining whether or not to include it.
Revenue Recognition, page 45
3. We note your disclosure that you recognize direct-to-customer revenues when the merchandise is delivered to the customer . Please tell us how you determine when this occurs. Also, please tell us whethe r your sales terms are consistent across all subsidiaries and all sales agreements and whether shipping terms are primarily FOB shipping point or destination.
Form 8-K, filed July 11, 2006
4. We note that during the second quarter of fiscal year 2006, you changed the estimate of the elapsed time for record ing income associated with unredeemed gift certificates and gift cards to four years from your prior estimate of seven years. Please address the following:
• Explain to us why an actuarial study was chosen rather than an analysis of your historical gift certificate and gift card redemptions to estimate your breakage.
Mr. Howard Lester Williams-Sonoma, Inc. August 30, 2006 Page 3 • Tell us if you analyzed your historic al gift certificate and gift card redemptions, and if so, tell us if your conclusion regarding the remoteness of redemptions would have been differe nt had they been predicated upon historical redemption activity. If you did not complete an analysis of your historical redemptions, tell us why not.
• Describe to us in detail how your prior breakage policy was established and tell us why the results of the actuar ial study supported th e change in the estimate of the elapsed time to four y ears from your prior estimate of seven years.
• Provide us with a copy of th e independent actuarial study.
* * * * *
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a cover letter that keys your responses to our comments and provides any requested in formation. Detailed cover letters greatly facilitate our review. Please understand th at we may have additional comments after reviewing your responses to our comments.
We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
Mr. Howard Lester Williams-Sonoma, Inc. August 30, 2006 Page 4 In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
You may contact Regina Ba lderas at (202) 551-3722 or Scott Ruggiero at (202) 551-3331 if you have questions regarding comm ents on the financial statements and related matters. Please contact me at (202) 551-3716 with any other questions.
Sincerely,
William Choi
Branch Chief
Show Raw Text
Mail Stop 3561
August 30, 2006
Mr. Howard Lester
Chief Executive Officer
c/o Mr. Seth Jaffe
General Counsel
Williams-Sonoma, Inc.
3250 Van Ness Avenue
San Francisco, CA 94109
Re: Williams-Sonoma, Inc.
Form 10-K for the Fiscal Year Ended January 29, 2006
Filed April 7, 2006
Form 8-K
Filed July 11, 2006
File No. 1-14077
Dear Mr. Lester:
We have reviewed your filings and have the following comments. We have
limited our review to your fi nancial statements and relate d disclosures and do not intend
to expand our review to other portions of your document. Please provide a written
response to our comments. Please be as deta iled as necessary in your explanation. In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure. After reviewing th is information, we may raise additional
comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Howard Lester
Williams-Sonoma, Inc.
August 30, 2006 Page 2
Form 10-K for the Fiscal Year Ended January 29, 2006
Note A: Summary of Significan t Accounting Policies, page 42
General
1. In future filings, please disclose the to tal amount charged to advertising expense
for each period presented. Please refer to paragraph 49(c) of SOP 93-7. Please also disclose the amount of cooperative advertising allowanc es netted against
gross advertising expense charged to selling and ad ministrative expenses.
Deferred Rent and Lease Incentives, page 44
2. We note your disclosure in Note E at page 52 that the rental payment
requirements in your store leases are typica lly structured as either minimum rent,
minimum rent plus additional rent base d on a percentage of store sales if a
specified store sales threshold is exceede d, or rent based on a percentage of store
sales if a specified store sales threshold or contractual obligations of the landlord
have not been met. Please expand your di sclosure in future filings to describe
your accounting treatment of any contingent rental amounts included in these lease agreements. Specifically, your di sclosure should explain whether you
include an estimate of contingent rent wh en calculating your deferred rent liability
as well as the factors that you consider when determining whether or not to
include it.
Revenue Recognition, page 45
3. We note your disclosure that you recognize direct-to-customer revenues when the
merchandise is delivered to the customer . Please tell us how you determine when
this occurs. Also, please tell us whethe r your sales terms are consistent across all
subsidiaries and all sales agreements and whether shipping terms are primarily
FOB shipping point or destination.
Form 8-K, filed July 11, 2006
4. We note that during the second quarter of fiscal year 2006, you changed the
estimate of the elapsed time for record ing income associated with unredeemed
gift certificates and gift cards to four years from your prior estimate of seven
years. Please address the following:
• Explain to us why an actuarial study was chosen rather than an analysis of
your historical gift certificate and gift card redemptions to estimate your
breakage.
Mr. Howard Lester
Williams-Sonoma, Inc.
August 30, 2006 Page 3
• Tell us if you analyzed your historic al gift certificate and gift card
redemptions, and if so, tell us if your conclusion regarding the remoteness of
redemptions would have been differe nt had they been predicated upon
historical redemption activity. If you did not complete an analysis of your
historical redemptions, tell us why not.
• Describe to us in detail how your prior breakage policy was established and
tell us why the results of the actuar ial study supported th e change in the
estimate of the elapsed time to four y ears from your prior estimate of seven
years.
• Provide us with a copy of th e independent actuarial study.
* * * * *
Please respond to these comments within 10 business days or tell us when you
will provide us with a response. Please furnish a cover letter that keys your responses to
our comments and provides any requested in formation. Detailed cover letters greatly
facilitate our review. Please understand th at we may have additional comments after
reviewing your responses to our comments.
We urge all persons who are responsi ble for the accuracy an d adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision. Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the
filing;
staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.
Mr. Howard Lester
Williams-Sonoma, Inc.
August 30, 2006 Page 4
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
You may contact Regina Ba lderas at (202) 551-3722 or Scott Ruggiero at (202)
551-3331 if you have questions regarding comm ents on the financial statements and
related matters. Please contact me at (202) 551-3716 with any other questions.
Sincerely,
William Choi
Branch Chief