Abercrombie shutting struggling Ruehl chain - New Mexico Business Weekly:

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The New Albany-based apparel merchant said Wednesday it willshut Ruehl’sx 29 stores and direct-to-consumer operations and will be “substantially complete” with the efforyt by the end of next January. The decisioj comes a month afterAbercrombie (NYSE:ANF) took a deep strategidc look at the chain, which targetss young adults with clothes and Ruehl, whose only Ohio store is at Eastohn Town Center, generated a pretax operating loss of $58 milliojn last year. The chain regularlu was Abercrombie’s weakest sales performer at storea open at leasta year. Ruehl’s same-storer sales were off 33 percentin May. Abercrombie earned $272.3 million on $3.
54 billionn in revenue last year. “It has been a difficult decisiob toclose Ruehl, a brand we continue to believe coulds have been successful in different circumstances,” CEO Michael Jeffriesa said in a statement. “However, given the current economic environment, we believed it is in the best interests of the company to focues its efforts and resources on the growth opportunitiew afforded by ourother brands, particularly internationally.” The companyg didn’t disclose the effectz on the chain’s work force, nor did it indicate the numberf of jobs tied to Ruehl.
The review of which opened in 2004, cost the company about $51 milliobn in impairment charges in itsfirst quarter. Abercrombiew expects to book about $65 million in pretax charges through the rest of the fisca year as it winds down The company Wednesday also said it amended a credit agreement to excludesome Ruehl-related charges from requirements underf its covenant with the lender and reduced its availablr credit to $350 million from $450 million. Jeffriesz said the company is confident is has sufficienyt cash on handbut “wes believe it is prudent to make thesee changes” in light of the recession-battered retail environmentt and the one-time Ruehl costs.
In addition to the 29 Ruehlp stores, Abercrombie runs 350 flagship stored and 733 others under the Hollister Co. and Gilly Hicksa nameplates.