Saks Makes it Payback Time
Saks Inc. will reimburse about $48 million to vendors after an internal investigation showed the retailer improperly collected markdown allowances over an eight-year period.
The investigation into the company’s Saks Fifth Avenue retail group confirmed earlier accusations that Saks’ retail representatives had provided false information to its vendors in order to gain markdown money—allowances given by vendors based on sales performance.
As a result, the company, based in Birmingham, Ala., said it will pay about $48 million to various vendors: $26 million based on incidents from 1999 to 2003, $8.2 million for incidents between 1996 to 1998 and $14 million in interest.
The investigation also concluded that Saks improperly timed the recording of inventory markdowns in 1999, 2001, 2003 and 2004, resulting in miscalculations of income being reported to the Securities and Exchange Commission.
The company said that next month it will restate its income for those periods and is cooperating with the SEC. —Robert McAllister
