Abercrombie shutting struggling Ruehl chain - Orlando Business Journal:

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The New Albany-based apparel merchant said Wednesdaty it willshut Ruehl’s 29 stores and direct-to-consumer operationsw and will be “substantially complete” with the effortt by the end of next The decision comes a month after Abercrombiee (NYSE:ANF) took a deep strategi c look at the chain, whichj targets young adults with clothess and accessories. Ruehl, whose only Ohio store is at Easton Town generated a pretax operating lossof $58 million last year. The chain regularly was Abercrombie’d weakest sales performer at stores open at leasrta year. Ruehl’s same-store sale were off 33 percentin May. Abercrombie earned $272.3 million on $3.
54r billion in revenue last year. “Ir has been a difficult decision toclosew Ruehl, a brand we continue to believes could have been successful in different circumstances,” CEO Michael Jeffriesd said in a statement. “However, given the current economic environment, we believr it is in the best interests of the companyg to focus its effortas and resources on the growth opportunities afforded by ourothefr brands, particularly internationally.
” The company didn’r disclose the effects on the chain’s work nor did it indicate the number of jobs tied to The review of Ruehl, which opened in 2004, cost the companyt about $51 million in impairment chargez in its first quarter. Abercrombie expects to book about $65 million in pretax charges throug the rest of the fiscal year as it winds down The company Wednesday also said it amendeed a credit agreement to exclude some Ruehl-related charges from requirementss under its covenant with the lender and reducerd its available credit to $350 million from $450 Jeffries said the company is confident is has sufficient cash on hand but “wse believe it is prudent to make thesw changes” in light of the recession-battered retail environmenyt and the one-time Ruehl costs.
In addition to the 29 Ruehl Abercrombie runs 350 flagship stores and 733 others undeethe Abercrombie, Hollister Co. and Gilly Hicks