Abercrombie & Fitch sued for discrimination

Clothing retailer Abercrombie & Fitch hires a disproportionately white sales force, puts minorities in less-visible jobs and cultivates a virtually all-white image in its catalogues and elsewhere, a lawsuit charges.

The federal lawsuit, filed Monday by nine Hispanic and Asian plaintiffs, alleges that Abercrombie discriminates against blacks, Hispanics and Asians by enforcing a nationwide corporate policy of preferring white employees for sales positions, desirable job assignments and favorable work schedules.

Anthony Ocampo, a Filipino-American who recently graduated from Stanford University, said he applied for a job at a store in Glendale, Calif., where he’d previously worked. After speaking with a manager, a salesperson told him, “We’re sorry, but we can’t rehire you because there’s already too many Filipinos working here,” Ocampo said.

A spokesman for the company, which targets college students with its upscale casual clothing, declined to comment on the lawsuit.

Investigation

Former Rite Aid leader faces prison sentence

The former head of Rite Aid Corp. pleaded guilty Tuesday to conspiracy in a billion-dollar accounting scandal that foreshadowed other cases of American corporate wrongdoing.

Martin L. Grass, 49, faces an eight-year prison sentence and more than $3.5 million in penalties under a deal submitted by federal prosecutors. He becomes the first major CEO to plead guilty in an accounting fraud case since the Enron scandal led to public outrage over white-collar offenders.

The Rite Aid probe began before other high-profile business scandals made household names of such companies as Enron and WorldCom, but it shares common elements with the later investigations, said Bryan Sierra, spokesman for the Department of Justice’s criminal division.

Wall Street

Payless cuts outlook

Payless ShoeSource Inc. slashed its second-quarter profit forecast Tuesday because of poor weather that stunted sales in May and the first two weeks of June.

The Topeka shoe-store chain said it now expected to report a small loss to a slight profit. It said May 14 that it expected second-quarter earnings of 40 cents a share to 45 cents a share.

The company said it foresaw the pressure on sales, margins and earnings to persist in the second half of the year.

Analysts were looking for second-quarter earnings of 29 cents a share on sales of $766.2 million, according to Thomson First Call.

Insurance

Lawrence resident to lead state program

Lawrence resident Paula Greathouse has been named director of the state’s Workers Compensation program, the Kansas Department of Human Resources announced Tuesday.

Greathouse spent the past eight years as an attorney with the Kansas Insurance Department, specializing in workers compensation issues.