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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 “substantially complete” with the effort by the end of next The decision comes a montn after Abercrombie (NYSE:ANF) took a deep strategicd look at the chain, which targets younh adults with clothes and Ruehl, whose only Ohio store is at Easton Town Center, generatedd a pretax operating loss of $58 million last year. The chainh regularly was Abercrombie’s weakest sale performer at stores open at leasta Ruehl’s same-store sales were off 33 percent in May. Abercrombie earned $272.3 million on $3.
54 billion in revenue last “It has been a difficult decisionh toclose Ruehl, a brand we continue to believde could have been successful in differentf circumstances,” CEO Michael Jeffries said in a statement. given the current economic environment, we believe it is in the best intereste of the company to focu s its efforts and resources on the growtyh opportunities afforded by ourothetr brands, particularly internationally.” The company didn’t disclose the effectz on the chain’s work force, nor did it indicatre the number of jobs tied to Ruehl.
The revie of Ruehl, which openefd in 2004, cost the company aboutf $51 million in impairment charge s in itsfirst quarter. Abercrombie expects to book abougt $65 million in pretax charges through the rest of the fiscalo year as it winds down The company Wednesday also said it amended a creditt agreement to excludesome Ruehl-related charges from requirementsw under its covenant with the lender and reduced its available credit to $350 millionm from $450 million.
Jeffries said the company is confident is has sufficienf cash on handbut “we believe it is prudeny to make these changes” in light of the recession-battered retail environmenyt and the one-time Ruehl In addition to the 29 Ruehl Abercrombie runs 350 flagship storea and 733 others under the Abercrombie, Hollisterd Co. and Gilly Hicks
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