Ollie's Bargain Outlet Holdings, Inc. (NASDAQ: OLLI)

DEFENDANT NAME: Ollie's Bargain Outlet Holdings, Inc.
CASE NUMBER: 1:19-cv-08647-JPO
CASE NAME: Maloney and Severe v. Ollie's Bargain Outlet Holdings, Inc. et al.
COURT: U.S. District Court for the Southern District of New York
PRACTICE AREA: Investor Fraud
STATUS: Active
CLASS PERIOD: 3/26/19 - 8/28/19
DATE FILED: 09/17/19
844-916-0895 [email protected]

This is a class action on behalf of investors that purchased Ollie’s securities between Mar. 26, 2019 and Aug. 28, 2019, seeking to pursue remedies under the Securities Exchange Act of 1934.

Ollie’s is a Harrisburg, Pennsylvania-based bargain retailer of closeout merchandise and excess inventory. Since its IPO in 2015, Ollie’s has embarked on an aggressive expansion campaign, growing from just 176 stores in 2014 to 324 stores in 25 states in 2019. The Company has outpaced competitors year-over-year by consistently posting comparable stores sales growth.

The case arises from Defendants’ misrepresentations and concealment of material facts about the Company’s expansion strategy, supply chain, quality of existing inventory, and prospects. Specifically, during the Class Period, Defendants assured investors and analysts that the Company had the necessary inventory to support both its expansion and comparable sales growth, stating that Ollie’s was “locked and loaded” with inventory for 2019, that the inventory “pipeline is full,” and that the Company’s deal flow was so strong that “we can very easily support our expansion efforts.” In turn, the Company provided rosy FY2019 earnings guidance, advising that investors should expect comparable stores growth of 1%-2%.

The operative complaint alleges that Defendants knew, however, that their statements about Ollie’s inventory and comparable store sales, as well as the FY2019 guidance, were false and materially misleading. According to the complaint, the Company was suffering from significant supply chain inventory issues, as well as a glut of low-margin inventory, since at least 1Q2019.  Defendants also allegedly knew that Ollie’s rapid expansion efforts were negatively impacting comparable store sales, both because supply chain issues that began in 1Q2019 were resulting in a lack of sufficient inventory to fill its new stores, and because less high-end inventory had eaten into comparable store sales and revenues. According to the complaint, these issues forced Ollie’s existing stores to divert inventory to the Company’s new stores.

The market learned of the supply chain and inventory issues on Aug. 28, 2019, when the Company slashed its FY2019 guidance due to supply chain issues that Ollie’s COO, John Swygert, admitted existed “for most — all of Q2.”  Due to the inventory supply chain issues and lower-margin inventory, the Company also reported a decrease in comparable store sales for the first time in five years.

On this news, Ollie’s shares plummeted almost 30%, thereby damaging investors.

On Dec. 5, 2019, the court appointed two Ollie’s investors as Lead Plaintiff and approved their selection of Hagens Berman to serve as Co-Lead Counsel for the Class.

On Feb. 26, 2020, Lead Plaintiffs filed their Amended Class Action Complaint for Violations of the Federal Securities Laws.

Secure Investor Fraud Tip Line
Hagens Berman fights for the rights of the underdog – those vulnerable to corporate negligence and fraud. We count on like-minded individuals such as former employees, whistleblowers and others, to come forward with information about widespread deceit, including securities fraud.

If you believe you have witnessed or have information regarding the alleged wrong doing at Ollie’s described above, please contact our secure tip line or email OLLI@hbsslaw.com to submit information. You may also speak to an attorney by calling our secure investor fraud tip line: 1-844-916-0892.

Hagens Berman is one of the country’s leading securities litigation law firms and is presently leading and investigating nationwide securities and derivative cases against some of the largest U.S. and international corporations for securities fraud, false and misleading statements, and/or Director waste, breach of fiduciary duty, or other malfeasance.  Our Firm’s independent research outpaces even government agencies, and we are the only firm dedicating its own resources to uncovering new instances of fraud.  Hagens Berman has also taken on corporations on behalf of investors throughout the United States for misleading or harming investors, and your claim will be handled by attorneys experienced in securities litigation.

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Case Timeline

02/25/20: Consolidated Amended Complaint Filed

Lead Plaintiffs filed their first amended class action complaint.

12/05/19: Appointed Co-Lead Counsel

Hagens Berman has been appointed Co-Lead Counsel in the securities class-action lawsuit against Ollie's Bargain Outlet Holdings, Inc.

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