Macy's Employee Conceals Over $130 Million in Expenses, Delaying Financial Reports.
Macy's, one of the largest department store chains in the U.S., reported that a rogue employee concealed over $130 million (£103 million) in company expenses over a period of approximately three years. The discovery has led to a delay in the release of Macy’s most recent financial statements, as the company investigates the incident.
Macy's, which also owns Bloomingdale's and Bluemercury, disclosed that the employee was responsible for monitoring expenses related to small package deliveries. According to the retailer, this individual acted independently, and the company stated that they believe no other employees were involved.
The Incident and Financial Impact
The issue came to light earlier this month as Macy’s was preparing its quarterly financial report. Upon investigation and forensic analysis, the company found that the employee had intentionally made incorrect accounting accrual entries starting in late 2021. These inaccurate entries concealed more than $130 million of delivery expenses, which were part of a larger total exceeding $4.3 billion over the same period.
Despite the significant amount involved, Macy’s emphasized that the concealed expenses represent only a small fraction of the total delivery costs, and the financial impact of this incident is limited. The company reassured stakeholders that the issue would not affect its obligations to other businesses.
Company's Response and Next Steps
In its statement, Macy's confirmed that the employee responsible for the fraudulent activity is "no longer employed" by the company. However, the company declined to confirm the specifics of the individual's termination. Macy's CEO Tony Spring highlighted the company's commitment to maintaining a culture of ethical conduct and assured investors that the matter was being handled appropriately.
“We are working diligently to complete the investigation as quickly as possible and ensure this matter is handled appropriately,” said Spring. “Our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season.”
Delays Amid Declining Sales and Holiday Season Pressures
The incident adds further challenges to Macy's, which is already grappling with declining sales as it heads into the crucial holiday shopping season. The department store chain, the largest in the U.S., faces heightened competition in an increasingly challenging retail landscape. With the holiday season typically being a major revenue driver, the timing of this financial setback is particularly concerning for the company.
Macy's has indicated that it will release a final report to investors on December 11. As the investigation into the rogue employee's actions continues, the company remains focused on navigating its financial difficulties and ensuring a strong performance during the holiday season.
Macy's, Inc. is one of the largest and most iconic department store chains in the United States. Founded in 1858 by Rowland Hussey Macy, the company began as a small dry goods store in New York City and has since grown into a retail giant with a national presence. Headquartered in New York City, Macy's operates a wide range of retail locations, including its flagship store in Herald Square, Manhattan, which is one of the most famous department stores in the world.
Macy's operates under several brands, including its flagship Macy's stores, Bloomingdale's, and Bluemercury. The company offers a wide range of products, from clothing and accessories to home goods and beauty items. Known for its iconic Macy's Thanksgiving Day Parade, Macy's has a strong national presence and a growing online business. Despite challenges in recent years, Macy's continues to adapt to the retail landscape with a focus on e-commerce and private-label offerings.
Ukrainian Citizen Pleads Guilty to Tax Fraud and Money Laundering Charges, Causing Over $9.5M in U.S. Tax Loss
