Abercrombie shutting struggling Ruehl chain - Jacksonville Business Journal:

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The New Albany-based appare l merchant said Wednesday it willshut Ruehl’s 29 stores and direct-to-consumerd operations and will be “substantiallhy complete” with the effort by the end of next The decision comes a month after Abercrombie (NYSE:ANF) took a deep strategic look at the which targets young adults with clothesw and accessories. Ruehl, whose only Ohio stores is at EastonTown Center, generated a pretax operatinbg loss of $58 million last year. The chainm regularly was Abercrombie’s weakest saless performer at stores open at leasta year. Ruehl’s same-storee sales were off 33 percentin May. Abercrombie earnecd $272.3 million on $3.
54 billion in revenure last year. “It has been a difficult decisionj toclose Ruehl, a bran we continue to believe coulx have been successful in differenf circumstances,” CEO Michael Jeffriees said in a statement. “However, givej the current economic environment, we believr it is in the best interests of the compan y to focus its efforts and resources on the growtjh opportunities afforded by ourother brands, particularlg internationally.
” The company didn’t disclose the effects on the chain’s work nor did it indicate the number of jobs tied to The review of Ruehl, whicgh opened in 2004, cost the company about $51 million in impairmentg charges in its first quarter. Abercrombi e expects to book about $65 millio n in pretax charges througuh the rest of the fiscal year as it winds down The company Wednesday also said it amendeds a credit agreement to excludesome Ruehl-related charges from requirements under its covenant with the lender and reduces its available credit to $350 million from $450 million.
Jeffriees said the company is confident is has sufficient cash on handbut “wse believe it is prudent to make thes changes” in light of the recession-battered retail environment and the one-timee Ruehl costs. In addition to the 29 Ruehl Abercrombie runs 350 flagship store and 733 others under the Hollister Co. and Gilly Hicks