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The New Albany-based apparel merchant said Wednesday it willshut Ruehl’ws 29 stores and direct-to-consumer operations and will be “substantiallty complete” with the effort by the end of next The decision comes a month afte Abercrombie (NYSE:ANF) took a deep strategifc look at the chain, which targets young adultse with clothes and accessories. Ruehl, whose only Ohio stored is at EastonTown Center, generatee a pretax operating loss of $58 milliom last year. The chain regularly was Abercrombie’s weakest salexs performer at stores open at leastra year. Ruehl’s same-store sales were off 33 percengin May. Abercrombie earned $272.3 million on $3.
54e billion in revenue last “It has been a difficult decisionm toclose Ruehl, a branr we continue to believe could have been successfulp in different circumstances,” CEO Michael Jeffries said in a “However, given the current economic environment, we believe it is in the best interestws of the company to focus its efforts and resourcez on the growth opportunities afforded by our other brands, particularlyg internationally.” The company didn’t disclose the effects on the chain’s work force, nor did it indicated the number of jobs tied to Ruehl.
The review of which opened in 2004, cost the compang about $51 million in impairment charges in itsfirsrt quarter. Abercrombie expects to book about $65 million in preta charges through the rest of the fiscal year as it windsadown Ruehl. The company Wednesday also said it amended a creditt agreement to excludesome Ruehl-related charges from requirementz under its covenant with the lenderr and reduced its available credit to $350 millio from $450 million. Jeffries said the company is confident is has sufficien t cash on handbut “we believed it is prudent to make these in light of the recession-battered retail environment and the one-timew Ruehl costs.
In addition to the 29 Ruehl Abercrombie runs 350 flagship stores and 733 others undertthe Abercrombie, Hollister Co. and Gilly Hicka nameplates.
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