BOULDER, Colo.--(BUSINESS WIRE)--The Shuman Law Firm today announced that a lawsuit seeking class action status has been filed in the U.S. District Court for the Southern District of New York on behalf of purchasers of Francesca’s Holdings Corporation, Inc. (“Francesca’s” or the “Company”) (Nasdaq: FRAN) securities between March 20, 2013 and September 3, 2013, inclusive (the “Class Period”). Francesca’s is a Texas-based company that operates a chain of retail boutiques.
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The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company's financial performance and future prospects. Specifically, the complaint alleges that during the Class Period, defendants failed to disclose the following adverse facts: (i) that unseasonably rainy and cold spring and summer weather had diminished the mall traffic Francesca's relied upon to drive same-store sales growth; (ii) that a competitive back-to-school retail environment weighed on same-store sales growth; (iii) that same-store sales were declining, forcing Francesca's to rely upon new store openings to increase sales; (iv) that Francesca's had been forced to engage in promotional selling at significant discounts during its first quarter 2013 in order to meet its financial targets; (v) that Francesca's had been forced to increase promotional activity during the second quarter of 2013; (vi) that Francesca's concealed the impact sales terms and margins with its suppliers would have on its ability to maintain above-average profit margins; and (vii) that, as a result, the Company was not on track to achieve the financial results defendants had led the market to expect during the Class Period. Importantly, the complaint also alleges that as a result of defendants' false and misleading statements during the Class Period, certain Company insiders were able to sell hundreds of millions of dollars of Francesca's stock at artificially inflated prices.
On September 4, 2013, shares of Francesca's fell nearly 26 percent to $17.79 after the Company announced its disappointing second quarter 2013 financial results and third quarter 2013 guidance.
If you are a member of the proposed class, you may request that the Court appoint you as lead plaintiff of the class no later November 26, 2013. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members.
The Shuman Law Firm represents investors throughout the nation, concentrating its practice in securities class actions and derivative litigation.