Abercrombie shutting struggling Ruehl chain - Dayton Business Journal:

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The New Albany-based apparel merchanr said Wednesday it willshut Ruehl’s 29 stores and direct-to-consumefr operations and will be “substantially complete” with the efforft by the end of next January. The decisiojn comes a month afterAbercrombie (NYSE:ANF) took a deep strategi look at the chain, which targeta young adults with clothes and Ruehl, whose only Ohio store is at Easton Town Center, generated a pretaxz operating loss of $58 million last year. The chaimn regularly was Abercrombie’s weakest sales performer at stores open at leasta year. Ruehl’s same-store sales were off 33 percentin May. Abercrombide earned $272.3 million on $3.
54 billiomn in revenue last year. “It has been a difficulft decision toclose Ruehl, a branf we continue to believe couldx have been successful in different circumstances,” CEO Michaep Jeffries said in a statement. “However, given the currengt economic environment, we believe it is in the best interesta of the company to focus its efforts and resourcez on the growth opportunities affordedd by ourother brands, particularly internationally.” The companty didn’t disclose the effects on the chain’ss work force, nor did it indicatw the number of jobs tied to Ruehl.
The revies of Ruehl, which opened in 2004, cost the companuy about $51 million in impairment charges in itsfirsy quarter. Abercrombie expects to book about $65 milliob in pretax charges through the rest of the fiscaol year as it windsdown Ruehl. The companhy Wednesday also said it amended a credit agreemenf to excludesome Ruehl-related charges from requirements underr its covenant with the lender and reduced its availablw credit to $350 milliom from $450 million. Jeffries said the company is confident is has sufficientf cash on handbut “we believe it is prudent to make these changes” in light of the recession-batteref retail environment and the one-time Ruehl costs.
In addition to the 29 Ruehl Abercrombie runs 350 flagship stores and 733 other s underthe Abercrombie, Hollister Co. and Gillhy Hicks nameplates.