Saks Settles With SEC
NEW YORK – Saks Inc. is reporting that it has settled with the Securities and Exchange Commission over a lawsuit that accused Saks Fifth Avenue of inflating its income. The company did not admit nor deny the allegations, and no fines were imposed.
The suit brought against the retailer alleged that Saks Fifth Avenue Enterprises misstated its income to vendors by failing to record markdowns between 1999 and 2003.
Saks CEO Stephen I. Sadove’s statement was brief: “I am pleased that this settlement with the SEC puts these matters behind us as we continue to execute our strategies for the long-term success of our business.”
According to Crain’s New York Business.com, the class action lawsuit began in 2005 with Manhattan-based Adamson Apparel, a company that sold products under the Baby Phat and XOXO names.
Saks’ own investigation in 2005 found $20 million in over-charges to vendors, which forced the retailer to fire some of its executives and restate six years of earnings.
