CSK Auto Fires Executives

Two top officials leave after a probe finds accounting irregularities related to inventory and allowances.
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CSK Auto

(CAO)

moved higher Thursday after the auto-parts retailer announced the firings of several employees following an internal probe into accounting for inventory and vendor allowances.

CSK said that Martin Fraser, president and chief operating officer, and Don Watson, chief administrative officer and former financial chief, have both left the company. Several other individuals in the finance organization have also departed, CSK said.

In addition, Chairman and Chief Executive Maynard Jenkins plans to step down.

"In view of these departures, my fellow directors and I determined that it is important that we identify my successor," Jenkins said in a press release. "Consequently, we have decided to initiate a search for a new Chief Executive Officer for the company."

Prior to the completion of that search, Jenkins will assume the duties previously held by the president and chief operating officer. He will retire, however, when a successor is in place.

The company's investigation, which began in March, identified accounting errors and irregularities that "materially and improperly impacted" inventory accounts, vendor allowances, other accrual accounts and related expense accounts. CSK plans to restate results for dating back to fiscal 2001.

The company has yet to release its results for fiscal 2005 and the first two quarters of fiscal 2006. The retailer did say that its total sales for the second quarter ended July 30 rose to $480 million from $419 million a year earlier.

CSK said that almost all of the increase was due to sales from Murray's Discount Auto stores, which the company acquired in December 2005. .Excluding sales from the Murray's stores, same-store sales declined 2.3%.

Shares of CSK recently were up 85 cents to $13.61.