Abercrombie shutting struggling Ruehl chain - Orlando Business Journal:

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The New Albany-based apparelp merchant said Wednesday it willshut Ruehl’sw 29 stores and direct-to-consumer operations and will be “substantiallgy complete” with the effort by the end of next The decision comes a month aftef Abercrombie (NYSE:ANF) took a deep strategifc look at the chain, which targets young adults with clothes and Ruehl, whose only Ohio store is at Easton Town generated a pretax operating loss of $58 millionh last year. The chain regularly was Abercrombie’s weakest sales performer at storexs open at leasta Ruehl’s same-store sales were off 33 perceny in May. Abercrombie earned $272.3 millionn on $3.54 billion in revenuwe last year.
“It has been a difficulf decision toclose Ruehl, a brand we continur to believe could have been successfulk in different circumstances,” CEO Michaeol Jeffries said in a statement. given the current economicc environment, we believe it is in the best interests of the companyy to focus its efforts and resources on the growt opportunities afforded by ourothert brands, particularly internationally.” The company didn’t disclose the effectsz on the chain’s work force, nor did it indicatde the number of jobs tied to Ruehl. The reviewq of Ruehl, which opened in 2004, cost the company about $51 million in impairment charges in itsfirsf quarter.
Abercrombie expects to book abouty $65 million in pretax charges through the rest of the fiscapl year as it windsdown Ruehl. The company Wednesdaty also said it amended a credit agreement to excludesome Ruehl-relatede charges from requirements under its covenant with the lendedr and reduced its available creditt to $350 million from $450 million. Jeffries said the company is confident is has sufficientf cash on handbut “wr believe it is prudent to make thess changes” in light of the recession-battered retail environment and the one-time Ruehl costs. In addition to the 29 Ruehkl stores, Abercrombie runs 350 flagship stores and 733 others undetrthe Abercrombie, Hollister Co.
and Gilly Hicks