Saks Fires Executives Over Improper Collections
By George Anderson
The issue of “markdown money” has been getting increased attention in retailing circles and the business press lately as vendors and regulators begin to more openly question the practice. Is it the legitimate attempt to move more merchandise or is simply a move to hide a retailer’s mistakes and prop up reporting results so that executives can continue earning their large salaries and bonuses?
An investigation by an internal audit committee at Saks Inc. found that there were abuses of the practice by senior executives within the company, with more than $20 million improperly collected between 1999 and 2003.
Yesterday, the retailer announced it had fired three individuals connected to the “overcollection” and planned to reduce or eliminate the bonuses paid to others, including R. Brad Martin, Saks Inc.’s CEO and Douglas Coltharp, Sak’s CFO.
According to a company press release, “Management has been asked to develop an action plan for enhanced ethics training, improved awareness of the company’s compliance and ethics ‘hotline,’ and similar matters.”
Moderator’s Comment: What are your thoughts on markdown money deals? Have ethics at Saks and elsewhere within the retailing business left the building
along with Elvis? –
George Anderson – Moderator
- Saks Incorporated Reports on Internal Investigation – Saks Inc./Business Wire
- 3 Saks Executives Fired Over Vendor Payments – The New York Times (free reg. required)