NEW YORK — Woolworth Corp.’s weekend announcement that two senior executives had voluntarily stepped aside on a temporary basis did little Monday to ease the concerns of factors and credit analysts.
On Sunday, four days after it announced some “accounting irregularities” would force it to restate its financial results for the year ended Jan. 29, Woolworth said William K. Lavin, chairman and chief executive officer, and Charles T. Young, senior vice president and chief financial officer, had stepped aside for the duration of the internal investigation into the accounting snafu.
Last week, factors and credit analysts reportedly advised their clients against shipping Woolworth and it seemed the retailer’s best efforts at damage control failed to convince the industry everything was running smoothly.
Most factors and credit analysts said Monday their advisory against shipping Woolworth remained in place.
The retailer, whose units include Woolworth variety stores and the Northern Reflections women’s apparel chain, has said the accounting irregularities affected only gross margins within several quarters and not the company’s yearend results.
Wall Street, which hammered Woolworth stock on Wednesday and Thursday following the announcement, dropping it a total of 2 7/8, or 17 percent, to 15 1/8, dropped the issue another 2 1/8 Monday to 13. It is traded on the New York Stock Exchange.
John W. Adams, chairman of Woolworth’s directors audit committee and chairman of the special committee of outside directors investigating the accounting snafu, has been named Woolworth’s interim chairman and ceo. The company said it expects to name an interim cfo soon.
A company spokeswoman said Monday the investigation would take six to eight weeks to complete.
Meanwhile, at least six additional shareholder lawsuits were filed late last week, bringing to at least 10 the number of suits alleging Woolworth management concealed information about the accounting irregularities.