SHAREHOLDERS FILE COMPLAINT AGAINST MACY’S

A lawyer has filed a class action complaint accusing Macy's Inc. of misleading investors by concealing its true financial condition after the merger with May Department Stores Co. He is currently looking for shareholders to join the case.

Alfred G. Yates Jr., a Pittsburgh attorney specializing in antitrust law, filed the complaint last week in U.S. District Court in Manhattan. According to court papers, the goal of the $27 billion department store chain was to inflate the shares of Federated Department Stores Inc., which has officially changed its name to Macy's Inc.

Yates sent out a press release looking for other shareholders to participate as lead plaintiffs in the case. The complaint alleges that directors and officers of Macy's purposefully concealed the information. The complaint said from Feb. 8 to May 15, Macy's overstated sales projections - primarily because of its "failed" integration of May doors. The retailer's action misled stockholders and the stock price rose significantly.

According to the complaint, "Macy's stock price increased dramatically on Feb. 8, 2007 - on more than twice the average daily trading volume over the preceding 10 days - when it reported January sales and preliminary fourth-quarter profit that exceeded estimates." This is said to have led to a trading high of $46.70 by March 23.

From May 10 to May 15, Macy's revealed that its same-store sales were down 2.2 percent, and revenue would be coming in 2 percent lower, while sales at stores open at least a year rose only 0.6 percent, missing the retailer's own forecast.

The complaint states that the company's stock price plunged to a price nearly 18 percent lower than its class period high, erasing over $3 billion in market capitalization."

(It seems to me that consumers want to express their individuality and enjoy seeking out retailers that distinguish themselves from the pack. One giant store that assimilates the thoughts and minds of many seems like a risk to me. But then again, no one asked me).