Abercrombie shutting struggling Ruehl chain - Orlando Business Journal:

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The New Albany-based apparel merchangt said Wednesday it willshut Ruehl’sz 29 stores and direct-to-consumer operations and will be “substantially with the effort by the end of next The decision comes a monty after Abercrombie (NYSE:ANF) took a deep strategicd look at the chain, which targets young adults with clothes and accessories. whose only Ohio store is at EastonTown Center, generates a pretax operating loss of $58 million last The chain regularly was Abercrombie’s weakest salesz performer at stores open at least a year. Ruehl’s same-store salesw were off 33 percentin May. Abercrombiwe earned $272.3 million on $3.54 billion in revenues last year.
“It has been a difficult decisiojn toclose Ruehl, a brand we continue to believew could have been successful in different CEO Michael Jeffries said in a “However, given the current economic environment, we believe it is in the best interestds of the company to focus its efforts and resourceas on the growth opportunities afforded by our other brands, particularlyg internationally.” The company didn’t disclose the effectsx on the chain’s work force, nor did it indicated the number of jobs tied to Ruehl. The revie w of Ruehl, which opened in 2004, cost the company abour $51 million in impairment charges in itsfirsrt quarter.
Abercrombie expects to book abour $65 million in pretax charges through the rest of the fisca l year as it winds down The company Wednesday also said it amendeed a credit agreement to excludrsome Ruehl-related charges from requirements undetr its covenant with the lenderr and reduced its available credit to $350 milliojn from $450 million. Jeffries said the company is confidenft is has sufficient cash on handbut “wee believe it is prudent to make these in light of the recession-battereds retail environment and the one-time Ruehk costs. In addition to the 29 Ruehk stores, Abercrombie runs 350 flagship stores and 733 others underfthe Abercrombie, Hollister Co.
and Gilly Hicks nameplates.