According to a press release dated February 03, 2011, the complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s true financial condition, business and prospects. Specifically, the complaint alleges that: (i) notwithstanding defendants’ mantra about the Company being a great turnaround story, demand for the Company’s full-price inventory was extremely soft, which had resulted in the Company becoming saddled with excess inventory that could not be sold at full price; (ii) the Company could not keep pace with its competitors without turning to the dramatic and widespread promotional pricing that defendants had stated the Company would not have to resort to; and (iii) as a result of (i) and (ii) above, defendants knew that the profit and revenue numbers that they forecast to the market were illusory and unattainable.
On January 11, 2011, Talbots provided a Business Update and reported that quarter-to-date top line sales were down approximately 7% versus the fourth quarter of the prior year and the Company’s previously announced expectation for fourth quarter top-line sales in the range of flat to down low-single digits. Additionally, quarter-to-date comparable store sales were down approximately 6%. As a result of this news, the price of Talbots common stock dropped 17.4%, from a closing price $7.57 on January 10, 2011 to close at $6.25 on January 11, 2011, on almost six times the stock’s average daily trading volume.
On July 27, 2011, the Plaintiff filed an amended complaint alleging violations of Sections 10(b) and 20(a) of the Exchange Act.
On August 15, 2012, Plaintiffs filed their second amended complaint.
On July 3, 2013, the Court issued a Report and Recommendation on Defendants' Motion To Dismiss. On September 23, 2013, the Court accepted and adopted the Defendants’ motion due to a failure on the part of the plaintiffs to plead sufficiently materiality. On the same day, the Court entered an Order of Dismissal of this case.