In re Pier 1 Imports, Inc. Securities Litigation
|Court:||U.S. District Court for the the Northern District of Texas, Dallas Division|
|Judge:||Hon. Karen Gren Scholer|
|Class Period:||12/19/2013 - 12/17/2015|
|Case Contacts:||Adam H. Wierzbowski, Jai K. Chandrasekhar|
Securities fraud class action filed on behalf of a class of persons and entities who purchased or acquired the securities of Pier 1 Imports, Inc. ("Pier 1" or Company) between December 19, 2013 and December 17, 2015 (the "Class Period").
On April 25, 2016, the Honorable Sidney A. Fitzwater appointed BLB&G client the Municipal Employees’ Retirement System of Michigan (“Michigan”) as Lead Plaintiff and BLB&G as Lead Counsel for the Class.
Lead Plaintiff alleges that during the Class Period, Pier 1 and its most senior executives misrepresented and concealed from the market that Pier 1 acquired excess inventory that far exceeded consumer demand and posed a substantial risk that the Company needed to engage in costly price markdowns to clear it. As Pier 1 only belatedly admitted, the Company operated for at least 18 months during the Class Period with a level of inventory that was “out of whack with demand.” During the Class Period, Pier 1’s distribution centers and logistics network operated inefficiently and incurred significant, previously undisclosed costs, such that, as of the end of the Class Period in December 2015, it would take at least another 18 months for inventory to return to normal levels and to track demand. These revelations were directly contrary to the representations Pier 1, its CEO (Smith) and its former CFO (Turner) made to investors during the Class Period. In all, as the Company revealed piecemeal to the public the true magnitude and severity of its exposure to markdown risk, caused by excess inventory, Pier 1’s stock dropped from a Class Period high of $23.11 on December 27, 2013 to $4.75 on December 17, 2015, a staggering reduction of over 80%.
Lead Plaintiffs filed the Amended Class Action Complaint in September 2017. Defendants moved to dismiss the Amended Complaint, and Judge Scholer granted their motion in June 2018, holding that the Amended Complaint did not adequately allege that Defendants acted knowingly or recklessly in making their alleged false statements. Lead Plaintiff appealed Judge Scholer’s decision to the United States Court of Appeals for the Fifth Circuit and filed its opening brief on appeal in November 2018. The appeal has been fully briefed, and oral argument is scheduled for June 12, 2019.
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