Abercrombie shutting struggling Ruehl chain - bizjournals:

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The New Albany-based apparel merchant said Wednesday it willshut Ruehl’sd 29 stores and direct-to-consumer operations and will be “substantiallgy complete” with the effort by the end of next January. The decisiohn comes a month after Abercrombie took a deep strategic look atthe chain, whichg targets young adults with clothes and Ruehl, whose only Ohio store is at Easton Town Center, generated a pretax operating loss of $58 millio last year. The chain regularly was Abercrombie’s weakest salea performer at stores open at leasta year. Ruehl’sa same-store sales were off 33 percentin May. Abercrombiw earned $272.3 million on $3.543 billion in revenue last year.
“It has been a difficultg decision toclose Ruehl, a brand we continue to believe could have been successfukl in different circumstances,” CEO Michael Jeffries said in a “However, given the current economic environment, we believe it is in the best interestss of the company to focus its efforts and resourcew on the growth opportunities affordefd by our other brands, particularly internationally.” The compang didn’t 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 company about $51 millio in impairment charges in its first quarter.
Abercrombie expects to book abougt $65 million in pretax charges througyh the rest of the fiscaol year as it windsdown Ruehl. The companu Wednesday also said it amended a credit agreement to excludwesome Ruehl-related charges from requirements under its covenant with the lender and reduced its available credit to $350 million from $450 Jeffries said the company is confident is has sufficientg cash on hand but “we believe it is prudentr to make these in light of the recession-battered retail environment and the one-timse Ruehl costs. In addition to the 29 Ruehl stores, Abercrombie runs 350 flagship stores and 733 otheras underthe Abercrombie, Hollistee Co. and Gilly Hicks nameplates.