Saks Delays Probe Report; SEC Launches Formal Inquiry
New York City, Saks Inc. announced late Monday it extended its internal probe into improper collections of vendor markdown allowances as the Securities and Exchange (SEC) opened a formal investigation into the matter. The retailer said its inquiry, disclosed on March 3, is expected to be completed in April. Saks initially said it would finish the investigation by the end of the month.
Additionally, the SEC, which has been conducting an informal probe, informed Saks on March 24 that it issued a formal order of investigation.
The investigation relates to alleged improper collections of vendor markdown allowances in one of Saks Fifth Avenue’s merchandising divisions. The adequacy of a 2002 initial internal investigation into the matter and accounting and disclosure issues that came up as part of the probe is also being investigated.
Walgreen 2Q Profits Up
Deerfield, Ill., Walgreen Co. reported second-quarter profit of $490.9 million, or 48? per share, up from $431.6 million, or 42? per share, a year earlier. Sales increased 12.3% to $11 billion from $9.78 billion a year ago, while comp-store sales rose 7.7% for the quarter.
“Our results benefited from continued solid execution at our stores, especially during the important holiday selling season,” said chairman and CEO Dave Bernauer in a statement. “Although the cold and flu season peaked later this year than the previous year, the overall effect on the quarter was fairly comparable.”
Former Penney Exec to Lead Mervyn’s
Dallas, Former J.C. Penney Co. executive Vanessa Castagna has joined private-equity firm Cerberus Capital Management, the New York-based company that is part of the investment group that acquired Mervyn’s Department Stores from Target Corp. last year. As a senior member of the Cerberus operations team, Castagna will take the helm of the Mervyn’s chain and will be charged with engineering the same turnaround for Mervyn’s as she did with J.C. Penney.
Castagna resigned from Plano, Texas-based J.C. Penney last November when she was passed over for the top job in the company in favor of Mike Ullman, who replaced retiring CEO and chairman Allen Questrom.
Castagna was credited with helping turn J.C. Penney around by bringing in new brands and leading marketing campaigns that helped the chain win back customers from rival chains.
Castagna has held senior executive positions with Wal-Mart Stores, Target Corp. and Federated Department Stores.