Lululemon target of class-action suit

Law firm Morgan & Morgan has announced a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of lululemon athletica, Inc. common stock during the period between March 21, 2013 and June 10, 2013.

Read: Help a client who’s being sued

The complaint alleges that defendants failed to disclose that:

a) product defects in the company’s Luon yoga pants shipped on March 1, 2013 resulted in part from the company’s attempts to raise profit margins by cutting costs;

b) the company was forced to sell product at a discount to obtain sales and protect market share;

c) discussions were underway concerning the possible replacement of CEO Christine McCormick Day; and

d) as a result of the defendants’ positive statements, shares of lululemon stock were artificially inflated.

On June 10, 2013, the company issued a release announcing its first quarter results and that Day was stepping down as CEO. Following this news, shares of lululemon fell $14.43 or 17.5%, to close at $67.85 on June 11, 2013.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.