Abercrombie shutting struggling Ruehl chain - Business First of Buffalo:

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The New Albany-based apparel merchant said Wednesday it willshut Ruehl’xs 29 stores and direct-to-consumet operations and will be “substantially complete” with the efforty by the end of next January. The decisionb comes a month afterAbercrombiee (NYSE:ANF) took a deep strategic look at the chain, whicjh targets young adults with clothes and Ruehl, whose only Ohio store is at Eastoj Town Center, generated a pretax operating loss of $58 milliohn last year. The chain regularly was Abercrombie’s weakesg sales performer at stores open at leasa 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. “Ig has been a difficult decision to close a brand we continue to believe coulde have been successful in different CEO Michael Jeffries said ina “However, given the current economic environment, we believe it is in the best interests of the companyh to focus its efforts and resources on the growth opportunitieds afforded by our other brands, particularluy internationally.” The company didn’t disclose the effectzs on the chain’s work force, nor did it indicate the numbert of jobs tied to Ruehl.
The reviea of Ruehl, which opened in 2004, cost the companh about $51 million in impairment charges in its first Abercrombie expects to bookabout $65 million in pretax charges through the rest of the fiscal year as it winds down Ruehl. The company Wednesdah also said it amended a credit agreement to exclud esome Ruehl-related charges from requirementas under its covenant with the lendee and reduced its available credit to $350 millioj from $450 million. Jeffries said the company is confidentt is has sufficient cash on handbut “wd believe it is prudent to make these in light of the recession-battered retail environment and the one-timr Ruehl costs.
In addition to the 29 Ruehll stores, Abercrombie runs 350 flagship storews and 733 others under the Hollister Co. and Gillg Hicks nameplates.