×
3 292
Fashion Jobs
TK MAXX
Tkmaxx Full-Time Loss Prevention Officer-Waltham Abbey
Permanent · London
TK MAXX
tk Maxx - Loss Prevention Officer - Full Time - Loughton
Permanent · London
TK MAXX
Tkmaxx Full-Time Loss Prevention Officer - Hackney
Permanent · London
DR. MARTENS
Financial Analyst, Apac
Permanent · TSIM SHA TSUI
SELFRIDGES
Finance Manager – Domains
Permanent · LONDON
HARVEY NICHOLS
Brand Consultant - Chloe
Permanent · LONDON
SPORTS DIRECT
Loss Prevention Supervisor
Permanent · LONDON
SPORTS DIRECT
Loss Prevention Supervisor
Permanent · ORPINGTON
HUGO BOSS UK LTD.
Sales Executive Boss Menswear
Permanent ·
TK MAXX
Loss Prevention Officer - Permanent - tk Maxx - Milton Keynes
Permanent · Milton Keynes
HOLLISTER CO. STORES
Hollister CO. - Graduate Manager in Training, Stratford (Westfield)
Permanent · London
UNDER ARMOUR
Stock Lead, ft (40 Hours)
Permanent · LONDON
SELFRIDGES
Finance Analyst- Domain
Permanent · LONDON
SELFRIDGES
Tech Business Analyst - Customer & Omni
Permanent · LONDON
HARVEY NICHOLS
Brand Consultant - Paul Smith
Permanent · LONDON
BURBERRY
Senior IT Operations Manager
Permanent · LONDON
BURBERRY
IT Project Manager
Permanent · LONDON
REISS
Retail Operations Coordinator-Part Time
Permanent · LONDON
REISS
Retail Operations Coordinator
Permanent · LONDON
HEAD OFFICE
Buyer, Waitrose & Partners (Level 7)
Permanent · BRACKNELL
HEAD OFFICE
Buyer, Waitrose & Partners (Level 5)
Permanent · BRACKNELL
JOHN LEWIS
General Operative – Warehouse
Permanent · DARWEN
Ads
By
Reuters
Published
Jun 17, 2009
Reading time
2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Abercrombie to close Ruehl, amends credit pact

By
Reuters
Published
Jun 17, 2009

By Martinne Geller

NEW YORK (Reuters) - Abercrombie & Fitch Co (ANF.N) said on Wednesday 17 June it will close its money-losing Ruehl chain, sending its shares up 4.6 percent on relief the clothing retailer will soon focus on core brands.


Abercrombie & Fitch

Abercrombie said the closure should be substantially done by the end of the current fiscal year, which began in February.

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

In addition to its namesake stores, Abercrombie also runs the Hollister and Gilly Hicks chains.

With the recession eating into discretionary budgets and even wealthy consumers looking for bargains, Abercrombie's sales have spiraled downward as the company kept its prices high to safeguard its cachet.

Ruehl, which used a Greenwich Village aesthetic to appeal to hip twentysomethings, saw sales at stores open at least a year fall 34 percent in the first quarter.

The 29-store chain generated a pretax operating loss of $58 million during the last fiscal year.

"The news of closing Ruehl today is largely viewed as a relief, came slightly sooner than expected and allows Abercrombie to focus its growth and capital on international business," said UBS retail analyst Roxanne Meyer.

A strategic review of Ruehl, which was announced in May, led the company to incur $51 million in impairment charges during the first quarter, which ended on May 2.

As a result of the closing, Abercrombie now expects to take additional charges of $65 million, which it will recognize largely during the remaining three quarters of its fiscal year.

Abercrombie also amended its existing credit agreement, allowing it to exclude some of the Ruehl-related charges from certain ratio calculations.

In connection with those changes, Abercrombie agreed to a reduction in the amount of available credit to $350 million from $450 million, an increase in the facility fee and borrowing costs and a capital expenditure limit of $600 million for this and the next fiscal year.

Jeffries was confident the company would continue to generate enough cash from operations to fund its liquidity needs and said the changes were made out of prudence.

"In light of the one-time costs associated with exiting Ruehl and the current uncertain economic conditions, we believe it is prudent to make these changes to give us significant cushion in our debt covenants," Jeffries said.

Abercrombie shares were up $1.19, or 4.6 percent, at $26.99 on the New York Stock Exchange on Wednesday.

(Reporting by Martinne Geller; editing by Matthew Lewis and Andre Grenon)

© Thomson Reuters 2023 All rights reserved.