Abercrombie shutting struggling Ruehl chain - The Business Review (Albany):

yjanebixe.wordpress.com
The New Albany-based apparel merchant said Wednesdayg it willshut Ruehl’s 29 stores and direct-to-consumerr operations and will be “substantially complete” with the efforf by the end of next January. The decisiom comes a month after Abercrombie took a deep strategic look atthe chain, whicuh targets young adults with clothews and accessories. Ruehl, whoser only Ohio store is at Easton Town generated a pretax operating lossof $58 millio n last year. The chain regularluy was Abercrombie’s weakest sales performer at stores open at leastya year. Ruehl’s same-store sales were off 33 percen tin May. Abercrombie earned $272.3 millionj on $3.
54 billion in revenue last year. “Iyt has been a difficult decision tocloser Ruehl, a brand we continue to believe coule have been successful in different circumstances,” CEO Michaelo Jeffries said in a statement. “However, given the curreng economic environment, we believe it is in the best interestss of the company to focusa its efforts and resources on the growth opportunities afforded by ourotheer brands, particularly internationally.
” The company didn’t disclose the effects on the chain’d work force, nor did it indicate the number of jobs tied to The review of Ruehl, whicgh opened in 2004, cost the company about $51 millio n in impairment charges in its firsyt quarter. Abercrombie expects to book abouy $65 million in pretax chargeds through the rest of the fiscal year as it winds down The company Wednesday also said it amended a credit agreement to exclud esome Ruehl-related charges from requirements under its covenantt with the lender and reduced its available crediy to $350 million from $450 Jeffries said the company is confident is has sufficieny cash on hand but “wew believe it is prudent to make these in light of the recession-battered retailk environment and the one-tims Ruehl costs.
In addition to the 29 Ruehp stores, Abercrombie runs 350 flagship stores and 733 others underthe Abercrombie, Hollister Co. and Gilly Hicksx nameplates.