Abercrombie & Fitch is closing its Ruehl stores, a victim of the recession. The upscale retailer said the reduction in consumer spending, especially in the upscale space, made it impossible to keep the stores open.
The closings are expected to be completed by the end of the company's current fiscal year.
Abercrombie & Fitch (NYSE: ANF) today announced that its Board of Directors approved the closure of its 29 RUEHL branded stores and related direct-to-consumer operations. The Company anticipates the closure will be substantially complete by the end of the current fiscal year.
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.
Ruehl, a brand aimed at an older demographic, generated a pre-tax operating loss of approximately $58 million for the fiscal year ended January 31, 2009, including a non-cash impairment charge of approximately $22 million, the company said. The pre-tax operating loss included store operating results and home office and other costs directly attributable to Ruehl operations.
"It has been a difficult decision to close Ruehl, a brand we continue to believe could have been successful in different circumstances," said Mike Jeffries, CEO of Abercrombie & Fitch Co. "However, given the current economic environment, we believe it is in the best interests of the company to focus its efforts and resources on the growth opportunities afforded by our other brands, particularly internationally."
The Company operates 350 Abercrombie & Fitch stores, 210 Abercrombie stores, 507 Hollister Co. stores, 29 Ruehl stores and 16 Gilly Hicks stores in the United States.