Two law firms, Schiffrin Barroway Topaz & Kessler, LLP and Kaplan Fox & Kilsheimer LLP filed class action suits on behalf of all persons who purchased the publicly traded securities of Crocs, Inc. from July 27, 2007 through October 31, 2007 against Crocs and certain of its officers for violations of the Securities Exchange Act of 1934.
One Complaint alleges that Crocs portrayed itself as a company with continuing growth in demand for its products that was expanding its business into Europe, Asia and South America. However, it is alleged that, unknown to investors, the company was experiencing material distribution problems in Europe, as it had moved distribution facilities to the Netherlands and was experiencing distribution problems in Japan with a third-party distributor; that the company's sales were being negatively impacted by seasonal conditions as consumers materially reduced purchases of the Company's products in Europe; and that the Company's inventory levels were materially building far beyond historic levels.
Another complaint claims that that Crocs was experiencing significant product distribution problems in Europe and Asia and these distribution problems were causing the company to be unable to capitalize on tens of millions of dollars in sales of its products due to their seasonal nature and changing weather conditions in certain markets. As a result, the company's inventory levels were significantly increasing due to such distribution problems and seasonal product sales; and that the company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made.
Neither law firm has a lead plaintiff to push their cases forward.
