Related Party Transactions

12 Months Ended

Jan. 03, 2015

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

During 2014, West Marine did not enter into any new related party transactions. In addition, the Company terminated one related party lease during 2014 and one during 2012, as further described below.

Randolph K. Repass, West Marine's founder and Chairman of the Board, is a general partner of three partnerships in which he, together with certain members of his family, owns substantially all of the partnership interests.

The related party transactions pertain to the fact that West Marine has leased its store in Santa Cruz, California, its store in Braintree, Massachusetts, and its support center in Watsonville, California since 1982, 1996 and 1988, respectively. These three properties are leased from Randolph K. Repass through the partnerships. Negotiations for these transactions were conducted at arms' length using independent representatives for each party at the time these leases were entered into. Although these leases have been in place for a number of years, the Company's Audit and Finance Committee nonetheless reviews these transactions annually to determine if they remain in the best interest of the Company. In this regard, the Committee considered that Mr. Repass entered into a re-negotiation of the rental terms for the support center during 2009, prior to the expiration of the lease term. Although under no compulsion to do so, Mr. Repass acknowledged the soft real estate market conditions at the time and agreed to a rent reduction. Additionally, in July 2011, a lease amendment was signed which reduced the amount of Watsonville support center storage space leased to the Company and which extended the storage space lease from November 2011 to October 2016 to be coterminous with the support center lease. Due to the lease amendment, the Company's related contractual obligation decreased by immaterial amounts for fiscal years 2011 through 2016.

West Marine leased its store in New Bedford, Massachusetts from a corporation of which certain of Mr. Repass' family members were either officers, stockholders or board members. The New Bedford lease expired in February 2012, and the Company terminated the lease in May 2012. The Company opened a new store in the neighboring area, which is leased from a party unrelated to West Marine. The Braintree, Massachusetts lease was terminated in September 2014, and the Company closed the store in June 2014. The Company opened a new flagship store in the neighboring area, which is leased from a party unrelated to West Marine.

The lease for the Company support center is West Marine's most significant related party transaction. West Marine made payments to the above-related parties during fiscal years 2014, 2013 and 2012 in the aggregate amount of approximately $1.7 million, $1.9 million and $1.8 million, respectively.

Related party transactions, including related party lease renewals, are pre-approved by West Marine's Board of Directors acting through the Audit and Finance Committee. The Audit and Finance Committee reviews and determines that the related party transaction is in the best interest of the Company and its stockholders. As of January 3, 2015, there were no amounts due to related parties.