Abercrombie shutting struggling Ruehl chain - St. Louis Business Journal:

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The New Albany-based apparel merchan said Wednesday it willshut Ruehl’s 29 stores and direct-to-consumee operations and will be “substantially complete” with the efforft by the end of next The decision comes a monthj after Abercrombie (NYSE:ANF) took a deep strategic look at the chain, whicn targets young adults with clothes and Ruehl, whose only Ohio store is at Eastoh Town Center, generated a pretas operating loss of $58 milliomn last year. The chain regularly was Abercrombie’s weakesy sales performer at stores open at leasra year. Ruehl’s same-store sales were off 33 percengin May. Abercrombie earned $272.3 million on $3.54 billion in revenue last year.
“It has been a difficul t decision toclose Ruehl, a brand we continue to believe could have been successful in different circumstances,” CEO Michae Jeffries said in a “However, given the current economic environment, we believw it is in the best interests of the compang to focus its effortss and resources on the growth opportunities afforded by our othetr brands, particularly internationally.” The company didn’t disclose the effect on the chain’s work force, nor did it indicated the number of jobs tied to Ruehl. The reviea of Ruehl, which opened in 2004, cost the companu about $51 million in impairmenr charges in itsfirst quarter.
Abercrombie expects to book about $65 milliobn in pretax charges through the rest of the fiscall year as it windsdown Ruehl. The company Wednesday also said it amended a crediyt agreement to excludesome Ruehl-related chargexs from requirements under its covenant with the lenderr and reduced its available credit to $350 milliom from $450 million. Jeffries said the companyg is confident is has sufficient cash on handbut “we believee it is prudent to make these changes” in light of the recession-battereed retail environment and the one-time Ruehl In addition to the 29 Ruehl stores, Abercrombie runs 350 flagshilp stores and 733 others under the Abercrombie, Hollister Co.
and Gillty Hicks nameplates.