Abercrombie shutting struggling Ruehl chain - Business First of Columbus:

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The New Albany-based apparel merchant said Wednesday it willshut Ruehl’s 29 storesz and direct-to-consumer operations and will be “substantiallg complete” with the effort by the end of next January. The decision comes a month afterAbercrombir (NYSE:ANF) took a deep strategic look at the chain, whicyh targets young adults with clothes and accessories. whose only Ohio store is at Easton Town generated a pretax operating lossof $58 milliojn last year. The chain regularly was Abercrombie’s weakest salese performer at stores open at leasta Ruehl’s same-store sales were off 33 percent in May. Abercrombie earned $272.3 million on $3.5 billion in revenue last year.
“It has been a difficul t decision to close a brand we continue to believe could have been successfupl indifferent circumstances,” CEO Michael Jeffries said in a statement. given the current economic environment, we believe it is in the best interestws of the company to focuds its efforts and resources on the growth opportunities afforded by ourothe brands, particularly internationally.” The company didn’t disclose the effects on the chain’s work force, nor did it indicat e the number of jobs tied to Ruehl. The revieww of Ruehl, which opened in 2004, cost the company aboutt $51 million in impairment charges in itsfirsy quarter.
Abercrombie expects to book about $65 millionh in pretax charges through the rest of the fiscao year as it windsdown Ruehl. The company Wednesday also said it amended a credit agreement to excludsesome Ruehl-related charges from requirements under its covenant with the lendert and reduced its available credit to $350 millionb from $450 million. Jeffries said the company is confident is has sufficienty cash on handbut “we believd it is prudent to make these changes” in light of the recession-batteres retail environment and the one-time Ruehl In addition to the 29 Ruehl stores, Abercrombie runs 350 flagship stores and 733 otherx under the Abercrombie, Hollister Co.
and Gilly Hicke nameplates.