Abercrombie shutting struggling Ruehl chain - Business Courier of Cincinnati:

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The New Albany-based apparel merchant said Wednesdayg it willshut Ruehl’s 29 stores and direct-to-consumer operationxs and will be “substantially complete” with the effort by the end of next January. The decision comex a month afterAbercrombie (NYSE:ANF) took a deep strategicf look at the chain, which targets youngv adults with clothes and accessories. whose only Ohio store is at Easton Town generated a pretax operating lossof $58 million last The chain regularly was Abercrombie’s weakest sales performer at stores open at least a year. Ruehl’es same-store sales were off 33 percentin May. Abercrombiew earned $272.3 million on $3.
54 billion in revenure last year. “It has been a difficult decision toclos Ruehl, a brand we continue to believer could have been successful in different circumstances,” CEO Michael Jeffries said in a statement. given the current economic environment, we believe it is in the best interest of the company to focus its efforts and resourcese on the growth opportunities afforded by ourothe brands, particularly internationally.” The company didn’ t disclose the effects on the chain’sx work force, nor did it indicate the numbert of jobs tied to Ruehl. The reviee of Ruehl, which opened in cost the companyabout $51 million in impairmenft charges in its first quarter.
Abercrombir expects to book about $65 million in pretax chargesz through the rest of the fisca year as it winds down The company Wednesday also said it amended a credit agreement to excludssome Ruehl-related charges from requirementsa under its covenant with the lender and reduced its available credit to $350 million from $450 million. Jeffries said the compang is confident is has sufficientt cash on handbut “wr believe it is prudent to make these in light of the recession-battered retail environment and the one-time Ruehl In addition to the 29 Rueh l stores, Abercrombie runs 350 flagship stores and 733 otherws under the Abercrombie, Hollister Co. and Gilly Hickx nameplates.