Insult and injury at Abercrombie & Fitch: poor earnings, and a lost lawsuit

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Today brought a double dose of bad news for Abercrombie & Fitch Co. (ANF). On top of disappointing earnings for the second quarter, the Associated Press reports that a London court has ordered the clothing chain to pay a disabled employee about $15,000 for injured feelings and wrongful dismissal.

The court turned down a discrimination claim that Abercrombie had disputed.

Riam Dean, a 22-year-old university student, had complained that her bosses would not let her wear a sweater to cover her prosthetic arm and tried to shift her off the shop floor. Dean's suit claimed that she was told she didn't fit in with the "look policy" at the chain's store on Savile Row in central London.

Abercrombie has run into trouble in the past for putting style first when hiring. Five years ago, it settled several employment discrimination suits in the U.S.

And the hits kept coming. This morning, Abercrombie posted disappointing second-quarter earnings -- a net loss of $19.8 million, due to $24.4 million in charges from closing down the Ruehl chain.

The company's same-store sales down 30 percent, to $648.5 million, over the second quarter of 2008. Sales at the Abercrombie stores were down 27 percent, and same-store sales at Hollister were down 31 percent. Back-to-school is turning into a glum time.
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