Bare Escentuals investors file class-action suit
This article was originally published in The Rose Sheet
Executive Summary
San Francisco-based firm made false and misleading statements regarding sales and financial performance, resulting in shareholders suffering "hundreds of millions" of dollars in damages, a complaint filed in U.S. District Court for the Northern District of California Aug. 25 alleges. Filed by Scott+Scott LLP, the complaint alleges that "a significant portion" of the firm's stellar infomercial sales revenues were dependent upon "unwittingly" signing up customers for club deals in which their credit cards were billed for multiple shipments beyond initial orders without their knowledge or consent, according to the complaint. The firm's image was diluted as distributors sold products through discounters such as Costco and efforts to revitalize infomercial sales were failing, which the complaint says was not disclosed to shareholders - leading to artificially inflated stock prices from Sept. 28, 2006 through May 30, 2007. A similar suit by the firm's shareholders was also filed in July (1"The Rose Sheet" July 27, 2009)
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People In Brief
Bare Escentuals adds to board: Mineral makeup company welcomes Michael R. Egeck to its board, bringing total number of directors to 10. Egeck comes to Bare Escentuals with extensive experience in lifestyle apparel marketing, most recently serving as president of VF Contemporary Brands and, before that, as president of VF Outdoor, a position in which he oversaw the merchandising, marketing and financial performance of The North Face, Reef, Vans and Jansport brands, according to Sept. 16 release. Egeck also has held management positions at Columbia Sportswear and Unionbay Sportswear. "His experience with developing and managing multiple retail brands will be an asset to our organization," says Bare Escentuals CEO Leslie Blodgett. The San Francisco-based company is being sued by shareholders who claim it made "false and misleading statements" regarding its sales performance that resulted in damages valued in the "hundreds of millions" of dollars (1"The Rose Sheet" Aug. 31, 2009, In Brief)
Bare Escentuals Accused Of Misleading Shareholders In Class Action Suit
Mineral makeup firm Bare Escentuals is alleged to have misled shareholders by withholding adverse information, according to a class action lawsuit filed in the U.S. District Court for the Northern District of California
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