Abercrombie shutting struggling Ruehl chain - Puget Sound Business Journal (Seattle):

ra-iwinyro.blogspot.com
The New Albany-based apparel merchant said Wednesday it willshut Ruehl’s 29 stores and direct-to-consumer operations and will be “substantiallyt complete” with the effort by the end of next January. The decisio n comes a month aftetrAbercrombie (NYSE:ANF) took a deep strategic look at the which targets young adults with clothes and accessories. whose only Ohio store is at EastobTown Center, generated a pretas operating loss of $58 million last year. The chain regularly was Abercrombie’s weakest salese performer at stores open at leasta year. Ruehl’es same-store sales were off 33 percentin May. Abercrombie earned $272.3 million on $3.
54 billionm in revenue last “It has been a difficult decision toclosre Ruehl, a brand we continue to believe could have been successful in differentf circumstances,” CEO Michael Jeffries said in a statement. given the current economic environment, we believe it is in the best interestsx of the company to focus its effortzs and resources on the growtn opportunities afforded by ourother brands, particularlyh internationally.” The company didn’t disclose the effectw on the chain’s work force, nor did it indicate the numbeer of jobs tied to Ruehl.
The revieqw of Ruehl, which opened in 2004, cost the companu about $51 million in impairment charges in itsfirstt quarter. Abercrombie expects to book aboutg $65 million in pretax charges through the rest of the fiscak year as it windsdown Ruehl. The companu Wednesday also said it amended a creditr agreement to excludesome Ruehl-related charges from requirementsd under its covenant with the lendert and reduced its available credit to $350 million from $450 million. Jeffries said the company is confident is has sufficient cash on handbut “wwe believe it is prudent to make these in light of the recession-battered retail environment and the one-tim e Ruehl costs.
In addition to the 29 Ruehlo stores, Abercrombie runs 350 flagship stores and 733 othersz underthe Abercrombie, Hollister Co. and Gillh Hicks nameplates.