Mervyn's must make stores more accessible: ruling

SAN FRANCISCO (Reuters) - Mid-tier department store chain Mervyn's LLC must make its stores more accessible to the disabled, a California appeals court ruled on Wednesday.

The California Court of Appeal reversed and remanded the case to a lower court that had ruled that accommodating the disabled in existing Mervyns stores would be too costly and should be undertaken only at its new stores.

The chain said Tuesday it filed for Chapter 11 bankruptcy protection.

The lower court was ordered to reconsider the case and issue a ruling that includes alternative ways for Mervyn's to make merchandise more accessible to disabled individuals -- short of constructing stores in new, geographically distant locations.

Mervyn's was sued by nonprofit group Californians for Disability Rights, which claimed the retailer denied access to disabled individuals due to its narrow merchandise aisles at some stores that could not accommodate wheelchairs.

In a bench trial, an Alameda County superior court judge said that up to 20 percent of Mervyn's merchandise was inaccessible to the disabled, but found that widening pathways for better accessibility to merchandise would cause a "significant loss of selling space and profit."

It ruled in favor of Mervyn's, arguing the company was constructing new and remodeled stores that would be more physically accessible.

The trial court relied upon evidence that "Mervyn's sales trends have been declining over the years, and have put the company in a difficult financial position," according to the appellate ruling.

Mervyn's, which is owned by private equity firms, said it filed for bankruptcy protection due to what it called the "state of the economy and difficult operating environment for our industry."

Stores will remain open while the company works through the bankruptcy process. It received a commitment for a $465 million debtor-in-possession financing from a lender group led by Wachovia Capital Finance Group.

(Reporting by Alexandria Sage; editing by Jeffrey Benkoe)