Abercrombie & Fitch finally pulls the plug on Ruehl

Posted Jun 17th 2009 3:10PM by Zac Bissonnette
Filed under: Abercrombie and Fitch (ANF)

Abercrombie & Fitch (NYSE: ANF) announced today that it would close all 29 of its Ruehl stores by the end of the fiscal year.

Abercrombie took a $51 million impairment charge related to Ruehl in the first quarter and now says it will have to charge off an additional $65 million over the rest of the year. In 2008, Ruehl generated a pre-tax loss of $58 million. In a press release announcing the decision, Abercrombie explained that "While it was encouraged by the initial performance of RUEHL, the Company has determined that, given the severe economic downturn and its impact on the retail and consumer sectors, the timing is not right to continue to pursue the further development of RUEHL."

CEO Mike Jeffries commented that "It has been a difficult decision to close RUEHL, a brand we continue to believe could have been successful in different circumstances."

The recession has been unkind to all of Abercrombie's brands, but Ruehl -- its smallest label -- has fared the worst, with a same-store sales decline of 33% for the month of May.

Given that, the demise of the chain is not at all surprising. Ruehl opened its first three stores on September 24th, 2004, but the more sophisticated style aimed at 22 to 35 year olds apparently never quite worked out.

Tags: Abercrombie and Fitch, AbercrombieAndFitch, ANF, inthenews