Abercrombie shutting struggling Ruehl chain - The Business Journal of Milwaukee:

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The New Albany-based apparel merchant said Wednesday it willshut Ruehl’sz 29 stores and direct-to-consumer operations and will be “substantially complete” with the effort by the end of next The decision comes a month after Abercrombie (NYSE:ANF) took a deep strategix look at the chain, which targets young adult with clothes and accessories. Ruehl, whose only Ohio storwe is at EastonTown Center, generatedc a pretax operating loss of $58 million last The chain regularly was Abercrombie’s weakesr sales performer at stores open at least a year. Ruehl’s same-storr sales were off 33 percentin May. Abercrombie earnedc $272.3 million on $3.
54 billion in revenue last “It has been a difficult decision tocloss Ruehl, a brand we continus to believe could have been successful in different circumstances,” CEO Michaelp Jeffries said in a statement. “However, given the current economic environment, we believe it is in the best interests of the companuy to focus its efforts and resources on the growthh opportunities afforded by our other particularly internationally.” The company didn’rt disclose the effects on the chain’e work force, nor did it indicater the number of jobs tied to Ruehl.
The reviewe of Ruehl, which opened in cost the companyabout $51 million in impairmenr charges in its first quarter. Abercrombie expects to book about $65 million in pretax charges througjh the rest of the fiscal year as it windsdown Ruehl. The companty Wednesday also said it amended a credit agreemengt to excludesome Ruehl-related chargesx from requirements under its covenangt with the lender and reduced its available credift to $350 million from $450 million. Jeffriesz said the company is confident is has sufficieny cash on handbut “we believe it is prudenf to make these changes” in light of the recession-battered retaip environment and the one-time Ruehl costs.
In addition to the 29 Ruehlo stores, Abercrombie runs 350 flagship stores and 733 others undertthe Abercrombie, Hollister Co. and Gillyg Hicks nameplates.