According to a press release dated October 11, 2011, the Defendants violated sections of the Securities Exchange Act of 1934.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, Defendants misrepresented and/or failed to disclose the following adverse facts: (i) that the Company was experiencing declining demand for its women’s fashion division, which makes up 70% of the Company’s sales; (ii) that the Company was enduring pressure on its profit margins as a result of increasing inventory and higher discounts on its clothing; and (iii) that, as a result of the foregoing, Defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
On August 4, 2011, the Company provided a business update for the second quarter of 2011. For the quarter, the Company reported net sales of $468.2 million, a decrease of 5% from the second quarter of 2010, and expected net earnings to be in the range of $0.02 to $0.03 per share – well below the Company’s guidance of $0.11 to $0.16 per share. In reaction to the Company’s announcement, on August 4, 2011, the price of the Company’s stock fell $3.99 per share, or 24%, to close at $12.53 per share, on extremely heavy trading volume.
According to a minute entry for proceedings held before Judge Colleen McMahon on January 11, 2012, lead plaintiff and lead counsel were appointed.
On February 10, 2012, plaintiffs filed an amended complaint.
On March 25, 2013, the Court issued an Order denying Defendant's motion to dismiss.
On July 17, 2013, the Court issued an Order certifying a class in this Action.
On January 29, 2014, the parties filed a Stipulation of Settlement. This Settlement was preliminarily approved on January 30. On May 14, 2014, the Court granted final approval of the Settlement and dismissed this case with prejudice.
On June 6, 2014, a Notice of Appeal of the above Order dismissing this case was filed. The Court of Appeals issued its Mandate on July 9, 2015, and affirmed the decision of the District Court.