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SFIX.US
id: 220

Stitch Fix ($SFIX) $32M Investor Settlement

The settlement terms have been submitted to the court for approval.
$32,000,000
Cash Settlement
N.D. California
Court
5:22-cv-04893
Case number
06/09/2020
Class period Start
06/09/2022
Class period End
Stitch Fix has agreed to a $32 million settlement with $SFIX investors to resolve claims related to alleged misstatements about its Direct Buy/Freestyle business.

On March 8, 2022, Stitch Fix provided a weak outlook for its Q3 2022 and cut its revenue guidance for the full year. Also, Stitch Fix announced self-inflicted friction between the Freestyle program and the Fix program.
On this news, the price of Stitch Fix stock declined by 6%.
Back on December 8, 2020, Stitch Fix launched the “Freestyle” program (a new, direct buy program where customers could choose from the outset which items to purchase) to “expand our addressable market, deepen client engagement and grow wallet share over time.” The Company repeatedly denied claims that the Freestyle program could cannibalize its legacy Fix business.
On December 7, 2021, however, Stitch Fix admitted for the first time that the Company had downplayed the magnitude of its transition from the subscription-based Fix model to the retail-based Freestyle model. But the Company continued to assure investors that this was a short-term problem.
Taking into account all the statements of the Company and the actual results, there are grounds for suspicion that there was misinformation or negligence from the Company's management, which led to significant losses for investors.
Case Type
US Securities Class Action
Case Status
Stipulative Settlement
Alleged Offence
Mismanagement, 
Misleading Statements, 
Financial Misrepresentation, 
Failure to Disclose, 
Malpractice, 
Negligence, 
Omissions
Suspected Party
Directors, 
Management
Security Type
Stocks
Trade Direction
Long
Payout per Share
0.17
Filing date
09/13/2024
Plaintiffs
Retail Wholesale Department Store Union Local 338 Retirement Fund
Attorneys
Bernstein Litowitz Berger & Grossmann LLP
Defendants
Elizabeth Spaulding; Katrina Lake
Administrator
A.B. Data Ltd
Attorney fee
$8,300,000
Trades matching type
FIFO

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