Saks Under SEC Investigation

Saks, owner of retailer Saks Fifth Avenue, revealed that it is under a formal investigation by the U.S. Security and Exchange Commission. The company also said that an internal investigation, originally due to be completed by the end of the month, is now expected to be completed in April.

The internal investigation by Saks’s Board of Directors’ Audit Committee relates to alleged improper collections of vendor markdown allowances in one of Saks Fifth Avenue's six merchandising divisions, the adequacy of an initial internal investigation in 2002 into this matter, and accounting and disclosure issues that have arisen in the course of the investigation.

The company said Monday it voluntarily informed the SEC of the internal investigation, which led it to open an informal inquiry. Last Thursday, the SEC notified Saks that it issued a formal order of private investigation.

Saks operates Saks Fifth Avenue Enterprises, which consists of 57 Saks Fifth Avenue stores and 52 Off 5th stores. The Company also operates its Saks Department Store Group, which consists of 238 department stores under the names of Parisian, Proffitt's, McRae's, Younkers, Herberger's, Carson Pirie Scott, Bergner's, and Boston Store and 38 Club Libby Lu specialty stores.