Abercrombie shutting struggling Ruehl chain - Birmingham Business Journal:

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The New Albany-based apparel merchant said Wednesday it willshut Ruehl’sa 29 stores and direct-to-consumer operations and will be “substantiallty complete” with the effort by the end of next The decision comes a month after Abercrombie (NYSE:ANF) took a deep strategic look at the chain, which targets yountg adults with clothes and accessories. Ruehl, whosse only Ohio store is at EastobTown Center, generated a pretax operating loss of $58 million last The chain regularly was Abercrombie’s weakest sales performerd at stores open at least a year. Ruehl’s same-store salez were off 33 percentin May. Abercrombiwe earned $272.3 million on $3.
5 billion in revenue last year. “It has been a difficultf decision toclose Ruehl, a brand we continud to believe could have been successful in different circumstances,” CEO Michael Jeffries said in a statement. “However, giveb the current economic environment, we believew it is in the best interests of the compan y to focus its efforts and resources on the growthn opportunities afforded by ourother brands, particularly internationally.” The company didn’tr disclose the effects on the chain’s work nor did it indicate the number of jobs tied to Ruehl.
The reviewq of Ruehl, which opened in 2004, cost the companuy about $51 million in impairment chargesa in itsfirst quarter. Abercrombiwe expects to book about $65 millioj in pretax charges through the rest of the fiscapl year as it windsdown Ruehl. The company Wednesday also said it amendedf a credit agreement to excludewsome Ruehl-related charges from requirements under its covenant with the lendefr and reduced its available credit to $350 millionb from $450 million.
Jeffries said the company is confident is has sufficientg cash on handbut “we believe it is prudent to make thesr changes” in light of the recession-batteresd retail environment and the one-time Ruehl In addition to the 29 Rueh stores, Abercrombie runs 350 flagship stores and 733 otherw under the Abercrombie, Holliste r Co. and Gilly Hicks nameplates.