Hanover Direct to restate five fiscal years, five quarters

-- Home Textiles Today, 11/10/2004 12:05:00 PM

EDGEWATER , N.J. — Catalog and Internet retailer Hanover Direct said the discovery by its audit committee of an accounting error will require the restatement of its financial statements for the fiscal years ended in late December 1999 through 2003.

Also to be restated are the financial results for quarters ended in March, June and September 2003 as well as the quarters ended in March and June 2004.

The error resulted from the accounting treatment of discount obligations due to members of some of the company's buyer's club programs for three of its catalogs since 1998. While the full impact is still being calculated, Hanover said it did result in the overstatement of revenues and the omission of the related liability for discount obligations for fiscal periods as early as 1998.

The retailer also announced that it is seeking permission from the Securities and Exchange Commission to extend the deadline for filing its quarterly report on Form 10-Q for the fiscal quarter ended Sept. 25, 2004, for up to five calendar days so that it may calculate the impact of restatement.