Abercrombie shutting struggling Ruehl chain - Nashville Business Journal:

haygoodfoafyga1359.blogspot.com
The New Albany-based apparel merchant said Wednesdayh it willshut Ruehl’s 29 stores and direct-to-consumefr operations and will be “substantially with the effort by the end of next January. The decision comesx a month afterAbercrombie (NYSE:ANF) took a deep strategic look at the which targets young adults with clothex and accessories. Ruehl, whose only Ohio store is at EastobnTown Center, generated a pretax operating loss of $58 millionj last year. The chain regularly was Abercrombie’s weakestr sales performer at stores open at leasta year. Ruehl’sw same-store sales were off 33 percenyin May. Abercrombie earned $272.3 millioj on $3.54 billion in revenur last year.
“It has been a difficult decision toclose Ruehl, a braned we continue to believe could have been successful in differentg circumstances,” CEO Michael Jeffries said in a statement. given the current economicd environment, we believe it is in the best interests of the companty to focus its efforts and resources on the growt h opportunities afforded by ourothe brands, particularly internationally.” The company didn’gt disclose the effects on the chain’s work force, nor did it indicatre the number of jobs tied to Ruehl. The revieww of Ruehl, which openerd in 2004, cost the company about $51 million in impairment charges in itsfirsft quarter.
Abercrombie expects to book about $65 milliobn in pretax charges through the rest of the fiscal year as it windsddown Ruehl. The company Wednesday also said it amendedf a credit agreement to excludesome Ruehl-related chargesz from requirements under its covenant with the lenderd and reduced its available credit to $350 million from $450 million. Jeffries said the company is confident is has sufficienf cash on handbut “we believee it is prudent to make these changes” in light of the recession-battered retail environment and the one-time Ruehl costs. In addition to the 29 Ruehll stores, Abercrombie runs 350 flagship stores and 733 otherss underthe Abercrombie, Hollister Co.
and Gilly Hicks