NEW YORK — Saks Inc. filed its annual report, Form 10K, with the Securities and Exchange Commission Thursday, which detailed the previously announced financial restatements relating to the retailer’s improper markdowns.
The restatements are for the fiscal years 2001 through 2004.
According to the annual report, adjustments were made to balance sheet and income statement items. On the income statement, sales for the restated periods remained unchanged, while net income adjustments varied.
In fiscal year 2004, the net income was restated downward by 12.6 percent to $72.4 million. For fiscal year 2003, net income was restated to $12.1 million, which is down 50.1 percent from the previously stated results. For the year 2002, the restatement had no “meaningful” impact on net income while the fiscal year 2001 showed a 2.1 gain in restated net income to $76.8 million.
Saks reiterated that vendor allowances of “approximately $34.1 million had been improperly collected from vendors in periods from fiscal 1996 through 2003,” and that the amounts are “attributable to overcollections that resulted from falsification by merchants in one [Saks Fifth Avenue] merchandising division of information delivered to vendors.”
Saks said it will pay interest of 7.25 percent a year to affected vendors, which will total $14 million. “In aggregate, the company expects to repay vendors a total of approximately $48.1 million during fiscal 2005,” it said in the filing.
Regarding the previously announced investigations by the SEC and the U.S. Attorney, Saks said in the annual report that it is “fully cooperating” with investigators.
This story first appeared in the September 2, 2005 issue of WWD. Subscribe Today.