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Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Ascena Retail Group, Inc. (ASNA)

NEW YORK, June 10, 2019 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Ascena Retail Group, Inc. (“Ascena” or the “Company”) (Nasdaq: ASNA) in the United States District Court for the District of New Jersey on behalf of those who purchased or acquired the securities of Ascena between September 16, 2015 and June 8, 2017, inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.

In August 2015, Ascena completed the acquisition of Ann Inc. (“Ann”), the parent company of Ann Taylor and LOFT (the “Ann Acquisition”).

The Complaint alleges Defendants failed to disclose that the Ann Acquisition was a complete disaster for the Company as Ann’s operations were in far worse condition than had been represented to the public; that, in order to mask the true condition of Ann, Defendants improperly delayed recognizing an impairment charge to the value of Ann’s goodwill and, as a result, Ascena’s reported income and assets were materially overstated and the Company’s financial results were not prepared in conformity with Generally Accepted Accounting Principles (“GAAP”); and that many of the brands acquired in the Ann Acquisition were in steep decline and were also materially overvalued on Ascena’s Class Period financial statements.  As a result of this information being withheld from the market, the price of Ascena common stock was artificially inflated to more than $14 per share during the Class Period.

On May 17, 2017, Ascena announced that it was revising its third quarter and full year 2017 sales and earnings outlook, due to “a period of unprecedented secular change that is disruptive to traditional business models,” and that the Company would be taking an impairment charge. On this news, the price of Ascena stock dropped from $2.82 per share to $2.06 per share, a decline of 26%. Then on June 8, 2017, Ascena announced its third quarter 2017 financial results, reporting a GAAP loss of $5.29 per diluted share compared to net earnings of $.08 per diluted share in the year-ago period. The loss included a non-cash pre-tax impairment charge of $1.324 billion (after tax impact of $5.22 per diluted share) to write down a portion of the Company’s goodwill and other intangible assets.

Investors who purchased or otherwise acquired shares during the Class Period should contact the Firm prior to the August 6, 2019 lead plaintiff motion deadline.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.

/EIN News/ --

Distribution channels: Consumer Goods, Law


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