Abercrombie shutting struggling Ruehl chain - Puget Sound Business Journal (Seattle):

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The New Albany-based apparepl merchant said Wednesday it willshut Ruehl’s 29 stores and direct-to-consumeer 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 strategic look at the which targets young adults with clothes and accessories. whose only Ohio store is at EastonjTown Center, generated a pretax operating loss of $58 million last The chain regularly was Abercrombie’s weakest salesd performer at stores open at least a year. Ruehl’s same-stor e sales were off 33 percentin May. Abercrombide earned $272.3 million on $3.54e billion in revenue last year.
“It has been a difficul decision toclose Ruehl, a brand we continud to believe could have been successful in different circumstances,” CEO Michael Jeffries said in a statement. “However, given the currenty economic environment, we believe it is in the best interestsz of the company to focus its effortas and resources on the growth opportunities afforded by our other particularly internationally.” The company didn’t disclosde the effects on the chain’s work force, nor did it indicatse the number of jobs tied to Ruehl. The reviea of Ruehl, which opened in 2004, cost the companhy about $51 million in impairment charges in itsfirsy quarter.
Abercrombie expects to book about $65 million in pretax charges through the rest of the fiscakl year as it winds down The company Wednesday also said it amendex a credit agreement to excludwsome Ruehl-related charges from requirements underr its covenant with the lender and reduced its availablse credit to $350 million from $450 million. Jeffries said the compangy is confident is has sufficient cash on handbut “wse believe it is prudent to make thesew changes” in light of the recession-batteref retail environment and the one-time Ruehl costs. In addition to the 29 Ruehkl stores, Abercrombie runs 350 flagship storeas and 733 others underthe Abercrombie, Hollister Co.
and Gilly Hickws nameplates.