Mecox Lane Limited

Pomerantz has been appointed Co-Lead Counsel in this case.

Pomerantz filed a class action lawsuit against Mecox Lane Limited (“Mecox” or the “Company”) (NASDAQ:MCOX) and certain of its directors and officers. This class action is on behalf of investors who acquired Mecox American Depositary Shares (“ADS”) traceable to the Company’s October 26, 2010 initial public offering (the “IPO”).

The Company operates China’s leading online platform for apparel and accessories as measured by revenues in 2009, offering a wide selection of fashion products through its e-commerce website and physical store network. 

In connection with the Company’s IPO, Defendants failed to disclose at the time of the IPO that: (1) it was already foreseeable that Mecox would not be able to achieve results for the third quarter of 2010 that were in line with either historical growth trends or defendants’ guidance; (2) the Company had already experienced disappointing results for the third quarter of 2010, including a significant decline in gross margins that were adversely impacted by increased costs and expenses; (3) defendants had not conducted an adequate due diligence investigation into Mecox; (4) the Company lacked adequate internal and financial controls; and (5) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.

On November 29, 2010, Mecox disclosed disappointing financial results for the third quarter of 2010, including a decline in gross margins of almost 400 basis points year-over-year, a 20.4% increase in Selling, General and Administrative expenses, and a 19.8% increase in Operating expenses. These increases were driven, in part, by an 11.6% increase in marketing expenses and a 40.2% increase in competition and benefits expenses. As a result of the disclosures, Mecox ADS declined $6.73 or more than 57% over two trading days.

This lawsuit has been filed in the Southern District of New York, (Civil Action No.: 11-cv-034). Claims asserted arise under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933.