Abercrombie shutting struggling Ruehl chain - The Business Review (Albany):

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The New Albany-based apparep merchant said Wednesday it willshut Ruehl’s 29 stored and direct-to-consumer operations and will be “substantiallyg complete” with the effort by the end of next The decision comes a month afted Abercrombie (NYSE:ANF) took a deep strategic look at the chain, whicg targets young adults with clothes and accessories. whose only Ohio store is at EastonTown Center, generated a pretas operating loss of $58 million last year. The chainj regularly was Abercrombie’s weakest sales performer at stores open at leastya year. Ruehl’s same-store sales were off 33 percen tin May. Abercrombie earned $272.3 milliojn on $3.
54 billion in revenue last year. “Iyt has been a difficult decision to close a brand we continud to believe could have been successful indifferentg circumstances,” CEO Michael Jeffries said in a “However, given the currenf economic environment, we believe it is in the best interestsa of the company to focus its efforts and resources on the growt opportunities afforded by our other particularly internationally.” The company didn’t disclose the effectxs on the chain’s work force, nor did it indicat e the number of jobs tied to Ruehl. The reviewa of Ruehl, which opened in cost the companyabout $51 million in impairment charges in its first quarter.
Abercrombie expecte to book about $65 million in pretas charges through the rest of the fiscak year as it winds down The company Wednesday also said it amendeed a credit agreement to excludesome Ruehl-related chargesz from requirements under its covenant with the lendeer and reduced its available credit to $350 millionh from $450 million. Jeffries said the company is confident is has sufficien t cash on handbut “we believe it is pruden to make these changes” in light of the recession-batteredx retail environment and the one-timd Ruehl costs. In addition to the 29 Ruehl Abercrombie runs 350 flagship stores and 733 others under the Hollister Co. and Gilly Hicks nameplates.