Saks Top Executives Ousted After Internal Investigation
Birmingham, Ala., Saks Inc. yesterday said it has ousted three top executives, including its chief accounting officer, after an internal investigation into improper collections of markdown allowances found that $20 million was inappropriately taken from vendors from 1999 to 2003.
Saks, which maintains that no improper collections seem to have taken place last year, has said that it will reimburse the vendors. The retailer is facing an informal inquiry by the Securities & Exchange Commission and the U.S. Attorney’s office in Manhattan.
The company said it has sought the resignation of its chief accounting officer Donald Wright and Saks Fifth Avenue chief administrative officer Donald Watros. Senior VP and brother of Saks CEO R. Brad Martin, Brian Martin, formerly Sak’s general counsel, was also asked to resign. Saks said that other employees “directly involved in the over-collection” will also be asked to resign. Sak’s audit committee of the board of directors has also recommended the elimination of bonuses for both its CEO and CFO, according to reports.
Sears Seeks Options for Hardware Unit
Hoffman Estates, Ill., Sears Holding Corp. today said it may sell or spin off its Orchard Supply Hardware unit, which operates a chain of 82 hardware and garden retail stores in California. Vice chairman and CEO Alan J. Lacy said that Sears Holdings was pursuing the option as it looks to focus attention on the core business created by the Sears-Kmart merger.
Citigroup Global Markets Inc. and Lehman Bros. are acting as financial advisers to Sears.
Great Atlantic May Sell Canadian Stores
Montvale, N.J., Great Atlantic & Pacific Tea Co., owner of A&P supermarkets, has hired JPMorgan Chase & Co. to find a buyer for its Canadian grocery-store business, according to reports. The sale of the 236 Dominion and Food Basics stores in Ontario could raise more than $1 billion, sources familiar with the sale said. Potential buyers include both Stellarton, Nova Scotia-based Sobey’s Inc. and Montreal-based Metro Inc., Canada’s second- and third-largest supermarket chains. Canada’s biggest supermarket chain, Toronto’s Loblaw Cos., may also be interested in the purchase, according to published reports.
Montvale, N.J.-based Great Atlantic posted a loss of $75.3 million for its fiscal third quarter, the sixth straight quarterly loss. The sale of its Canadian grocery-store business could raise money to help pay down debt and refurbish stores to bolster future earnings.