Retail research gets firm in big trouble

Tampa-based Retail Intelligence Group LLC probably didn't expect to make national headlines when it was visiting Big Lots Inc. stores and surveying their managers.

But the Columbus, Ohio-based discounter sued over information gleaned by the small firm, and that could affect the way stock researchers work in the future.

Big Lots filed its complaint against Retail Intelligence in Hillsborough County Circuit Court on Nov. 22, alleging it effectively stole trade secrets and forced employees to breach fiduciary duty. The lawsuit was covered in The Wall Street Journal.

The suit comes amid a nationwide probe in which federal prosecutors are piecing together evidence that could expose endemic insider trading, the Journal reported. Big Lots claims its suffered from an Oct. 20 report by Retail Intelligence that warned of a “substantial slowdown” in its third-quarter performance.

Retail Intelligence's website claims its clients can “test hypotheses, identify investment opportunities, and realize threats/declines ahead of other investors.”

Derek Noce, the firm's director and senior analyst, declined comment to Coffee Talk.

Big Lots' stock fell at least 10% in the wake of the Retail Intelligence report and bobbed around the $30 mark throughout November, around the middle of its 52-week range. The chain is set to post third-quarter financial results Dec. 3.