A class action lawsuit has been filed on behalf of those who purchased or acquired The Gap, Inc. (“Gap”) (NYSE: GPS) securities between November 24, 2021 and July 11, 2022, inclusive (the "Class Period").
Case Background:
On April 21, 2022, Gap announced that Nancy Green, CEO of Old Navy, had stepped down. Following this news, the price of Gap stock fell nearly 18%.
Then, on May 20, 2022, The Wall Street Journal published an article revealing that Gap had improperly managed its inventory of plus size clothing at its Old Navy stores, causing material declines in margins and business results. Specifically, the article stated, among other things, that "Old Navy set out to make clothes shopping more inclusive for women of all body types. It ended up with too many extra-small and extra-large items and too few of the rest, a mismatch that frustrated customers and contributed to falling sales and a management shake-up." Further, that "Gap warned that sales for the spring quarter would fall short of expectations in part due to troubles at Old Navy[,]" but that "[t]he extended sizes were the culprit, according to current and former employees." Finally, the article indicated that "Old Navy's stumbles don't bode well for Gap Inc. In 2021, Old Navy accounted for 54% of the company's sales and roughly 80% of profits [.]" Following this news, the price of Gap stock fell approximately 7% over the next two trading sessions.
Thereafter, on May 27, 2022, Gap admitted that execution missteps in size and assortment of inventory at Old Navy adversely impacted Gap’s financial results. Following this news, the price of Gap stock fell nearly 5%.
Finally, on July 11, 2022, Gap announced that its President and CEO, Sonia Syngal, was stepping down from her position as President and CEO of Gap and had resigned from the Board of Directors. Following this news, the price of Gap stock fell an additional 5%.
The complaint against Gap alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) there were execution missteps in size and assortment at Old Navy related to BODEQUALITY which were adversely impacting Old Navy’s margins and financial results; (2) contrary to the company’s statements, there were inventory risks relating to BODEQUALITY that were actually existing that were adversely affecting the company’s operations; and as a result (3) the company’s statements during the Class Period about the historical financial and operational metrics and purported market opportunities did not accurately reflect the actual business, operations, and financial results and trajectory of the company, and were materially false and misleading, and lacked a factual basis.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
