Saks Inc., the luxury retailer under a federal accounting probe, will repay $48.2 million to vendors after improperly collecting markdowns from them over eight years, Bloomberg News reports.
The company on Wednesday said it will return $34.2 million that its Saks Fifth Avenue unit brought in, more than the $20 million disclosed in May. Saks will pay $14 million in interest that will be accounted for in restated earnings, a Saks spokeswoman reportedly said Wednesday.
The company, which completed an internal investigation, said that it gave vendors false information to get the markdown money and that it will discipline one employee whom it didn’t name.
The Securities and Exchange Commission and the U.S. attorney for the Southern District of New York are investigating Saks’ vendor allowances. The owner of the Saks Fifth Avenue chain disclosed an inquiry on the payments in March, saying it believed it had improperly collected $21.5 million in discount allowances.
The company said it would restate earnings for its fiscal 2003 and 2004.
Allowances are payments that clothing manufacturers sometimes make to retailers to compensate them for markdowns taken to sell their merchandise.
On May 9, Saks asked chief accounting officer Donald Wright, senior vice president Brian Martin, and Donald Watros, the administrative head of Saks Fifth Avenue, to resign.