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Retailer says it wrongly collected $21.5 million

Friday, March 4, 2005 | 9:22 a.m.

Saks Inc., owner of the Saks Fifth Avenue chain, said it improperly collected as much as $21.5 million from vendors in discount allowances, primarily between the fiscal years 2000 and 2002.

Saks told the U.S. Securities and Exchange Commission it began an internal investigation, which will conclude this month, and intends to reimburse the vendors, Birmingham, Ala.-based Saks said in a statement. The SEC has also started an informal inquiry, Saks said in the statement.

The company had no previous incidents of improper vendor collections, Chief Financial Officer Douglas Coltharp said in an interview. Coltharp declined to comment on either who or what caused the improper collections.

Saks also said the company's earnings from fiscal 1999 through the fiscal third quarter of 2004 will be reduced by $31.6 million because of accounting changes related to lease items such as depreciation and tenant improvements, Coltharp said.

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