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A sheep in wolf's clothing?
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June 2, 1998: 3:38 p.m. ET
Abercrombie & Fitch takes rival to court, alleges copying of merchandise
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NEW YORK (CNNfn) - In what appears to be the corporate equivalence of a schoolyard brawl, specialty retailer Abercrombie & Fitch is hauling one of its key competitors into a court, claiming the company is ripping off its clothing styles and business practices.
Reynoldsburg, Ohio-based Abercrombie & Fitch has accused American Eagle Outfitters of Warrendale, Pa.. of "intentional and systematic copying" of its merchandise, image and business practices.
The lawsuit, filed Tuesday in Federal District Court in Columbus, Ohio, sent American Eagle Outfitters' (AEOS) stock down 2-5/8 to 32-7/8 on the Nadsaq Tuesday afternoon, a 7 percent drop.
Abercrombie & Fitch shares (ANF) fell 11/16 to 41-5/16 in afternoon trading on the New York Stock Exchange.
A spokesman for American Eagle Outfitters said: "American Eagle does not engage in any illegal, improper or unethical business practices."
The company is reviewing the lawsuit and may have further comment later this afternoon, the spokesman said.
Abercrombie & Fitch, a $522 million outdoor sportswear company, alleges American Eagle lifted everything including the design and look of its merchandise, marketing and catalog/magazine.
The lawsuit seeks to enjoin American Eagle's practices, recover American Eagle's profits and obtain unspecified punitive damages.
Abercrombie & Fitch, which has posted 23 consecutive quarters of record-breaking earnings, has 159 stores nationwide.
In April, Limited Inc. (LTD) established the terms for the tax-free exchange offer that would carve out its 84 percent interest in Abercrombie & Fitch.
Under terms of the deal, valued as high as $1.87 billion, Limited said it would distribute all of its 43.6 million Abercrombie shares.
Limited first took 16 percent of the century-old retailer public through an initial public offering in September 1996 to help reinvigorate its own then-sluggish stock.
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