CVS, BJ's Received SEC Inquiry Letters on Vendor Rebates
NEW YORK - CVS Corp. and BJ's Wholesale Club Inc. said they have received and responded to informal letters of inquiry by the Securities and Exchange Commission regarding their handling of rebates from suppliers, according to a Dow Jones newswires report.
CVS, Woonsocket, R.I., the nation's second-largest drugstore chain, and BJ's, the nation's third-largest chain of warehouse clubs, are the latest companies to report they are part of a newly launched SEC probe into the way major New England retailers account for rebates and incentives from suppliers in their books.
Vendor "allowances," or monies received from suppliers in exchange for meeting sales targets or performing marketing efforts, are receiving greater scrutiny in the wake of a large accounting scandal at Dutch food conglomerate Ahold NV's U.S. Foodservice unit, which overstated two years' worth of profits by $880 million through abuses related to vendor allowances.
It isn't clear whether there is any direct relationship between the New England inquiry and the restatement by Ahold, which operates some grocery stores in New England. SEC officials declined to comment Friday, but officials at the agency have said in recent weeks the SEC is expanding its probe of vendor-rebate accounting to retailers outside of the food business.
Staples Inc., Framingham, Mass., said earlier this week in a regulatory filing it had received a similar letter of inquiry that requested information on "rebates, allowances, discounts, coupons, bonuses, sales incentives, slotting fees, co-operative advertising, buy-downs and free products or services." The office-supplies retailer declined to comment beyond the filing.
CVS, Woonsocket, R.I., the nation's second-largest drugstore chain, and BJ's, the nation's third-largest chain of warehouse clubs, are the latest companies to report they are part of a newly launched SEC probe into the way major New England retailers account for rebates and incentives from suppliers in their books.
Vendor "allowances," or monies received from suppliers in exchange for meeting sales targets or performing marketing efforts, are receiving greater scrutiny in the wake of a large accounting scandal at Dutch food conglomerate Ahold NV's U.S. Foodservice unit, which overstated two years' worth of profits by $880 million through abuses related to vendor allowances.
It isn't clear whether there is any direct relationship between the New England inquiry and the restatement by Ahold, which operates some grocery stores in New England. SEC officials declined to comment Friday, but officials at the agency have said in recent weeks the SEC is expanding its probe of vendor-rebate accounting to retailers outside of the food business.
Staples Inc., Framingham, Mass., said earlier this week in a regulatory filing it had received a similar letter of inquiry that requested information on "rebates, allowances, discounts, coupons, bonuses, sales incentives, slotting fees, co-operative advertising, buy-downs and free products or services." The office-supplies retailer declined to comment beyond the filing.