Abercrombie & Fitch shutters Ruehl stores
Filed under: Company News, Economy
In a move that surprised nobody, Abercrombie & Fitch (ANF) today announced plans to shutter its struggling 29-store Ruehl chain by the end of the year.
Perhaps the chain's offerings were out of step with the times. Ruehl sought to define "the aspirational Greenwich Village lifestyle" with high-priced "signature styles" of clothing. The names of its products invoked a trendy kind of sophistication that the New York City neighborhood is known for; "One Night Stand," "Buying Drinks" and "Chance Encounter" pocketbooks went for $298, while jeans sold for $118 and a pair of leather flip-flops fetched $50.
Ruehl generated a pre-tax operating loss of about$58 million for the fiscal year ended January 31, 2009 , including a non-cash impairment charge of approximately $22 million . In a statement, Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said he was disappointed that the chain was closing.
"It has been a difficult decision to close Ruehl, a brand we continue to believe could have been successful in different circumstances," Jeffries said in a press release.
Wall Street criticized Abercrombie & Fitch for taking so long to close Ruehl. Abercrombie took a $51 million impairment charge related to Ruehl in the first quarter and will have to charge off an additional $65 million over the rest of the year. Same-store sales at Ruehl fell 33 percent in May alone.
The company also announced that it has amended its existing credit agreement to exclude from its calculation of the minimum coverage and maximum leverage ratios up to$61 million of the estimated $65 million of additional pre-tax charges associated with exiting Ruehl. Abercrombie & Fitch also 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 the 2009 and 2010 fiscal years, including not more than $275 million for fiscal 2009.
Perhaps the chain's offerings were out of step with the times. Ruehl sought to define "the aspirational Greenwich Village lifestyle" with high-priced "signature styles" of clothing. The names of its products invoked a trendy kind of sophistication that the New York City neighborhood is known for; "One Night Stand," "Buying Drinks" and "Chance Encounter" pocketbooks went for $298, while jeans sold for $118 and a pair of leather flip-flops fetched $50.
Ruehl generated a pre-tax operating loss of about
"It has been a difficult decision to close Ruehl, a brand we continue to believe could have been successful in different circumstances," Jeffries said in a press release.
Wall Street criticized Abercrombie & Fitch for taking so long to close Ruehl. Abercrombie took a $51 million impairment charge related to Ruehl in the first quarter and will have to charge off an additional $65 million over the rest of the year. Same-store sales at Ruehl fell 33 percent in May alone.
The company also announced that it has amended its existing credit agreement to exclude from its calculation of the minimum coverage and maximum leverage ratios up to
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Reader Comments (Page 1 of 7)
6-17-2009 @ 6:44PM
Larry said...
Rustler jeans from Wal Mart $10.00 a pair
Reply
6-18-2009 @ 11:09AM
Jason said...
Damn right larry! all of my jeans are from walmart, the price is cheap, they feel good and they actually fit.
6-18-2009 @ 11:01PM
kira said...
Lol. Agreed! I refuse to pay no more than $20 for a pair of jeans or pants.
6-19-2009 @ 12:15AM
otool said...
POOR THING..
6-19-2009 @ 1:55PM
jim said...
everyhing sold in walmart is cheap it is not made in usa
6-19-2009 @ 10:10PM
Colleen said...
And guess what--they're probably all made in China anyway! So, what are you paying for? Better paid Chinese workers? Environmentally responsible Chinese factories? Doubt it!
6-17-2009 @ 7:28PM
wayne said...
Love Rhuel. I'm sorry to see them go. They have about 6 pairs of their jeans and love them.
Reply
6-19-2009 @ 1:12AM
mary said...
silly store, doomed from the start. everything about it was phony. the facade, the "style," the sales help. i entered with my two college-age daughters a couple of years ago out of curiosity. we made one pass through the store, and were so turned off by the forced "cool-ness" that we rolled our eyes and left.
6-17-2009 @ 10:24PM
Sharon said...
Well, no wonder! The storefront...it's impossible to tell what goes on in there. If you didn't know it was a clothing store you'd never venture inside. Then, once inside...Geez! Who would pay $40 for a plain white t-shirt, not to mention the $150 jeans?
Reply
6-18-2009 @ 9:47AM
Jackie said...
I so agree with you! And their ads were semi porn....I'm not sorry to see them GO!
6-18-2009 @ 12:39AM
dillon said...
1) the storefronts are disguised to not look like a storefront, i passed the one in LA for months before i ever went inside.. i t was obviously a 'something' but with such low profile frontage it was very easy to pass it by without caring/wondering what it was. could be the lost&found office from it's outside appearance. Inside, just a rearranged, relabeled A&F. same fixtures, same merch, same colors, same fabrics, higher price. Looked like they were questing for an older consumer to see how much more they could make by rebranding the exact same product they already produce and sell at A&F to teens.. what they found, i think, is that A&F's prices already test the limits of what people will pay for this product, and that there is actually a limit to the appeal of oversized photos of seminude hairless pouty teenage boys, at least when it comes to selling clothes to adults.
Reply
6-18-2009 @ 1:48PM
J . Turner said...
well said dillon
6-19-2009 @ 4:18PM
JC said...
overpriced, glorified A & F. Granted, Ruehl's quality was a notch above AF but not enough to justify the difference.
Ruehl came to existence with RIDICULOUS high prices and somehow it was brought down to "reality", AF reality, that is.
I honestly don't understand how they tried to position themselves as a 20's AF with a more professional look. Flip flops, same torn jeans, same tight shirts, same baseball caps, same sexy ads. Yeah, more grown up, sure.
Ruehl's plug should've been pulled months ago.
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6-23-2009 @ 1:22PM
JC said...
Forgot, the only thing I like about Ruehl is their 925 mens fragrance, it truly is delicious. I hope (doubt it) to snap up some of these colognes on the cheap whenever Ruehl clears out all their crap during their liquidation sales later on in '09.
Reply
6-18-2009 @ 9:03AM
DeeDee1224 said...
They should of been shut down a long time ago. All the tweens wanted clothes from there but unfornunitly tweens are not done growing, that meant that only the super skinny kids could buy the clothes, 0-4,large looked like it could fix a 5 year old. I bought my daugher a $200.00 gift card for xmas one year not knowing the size selection they had, not one thing in there would fit her, they would not give me the money back, I could not find one thing in there to fit her. I ended up giving it to her brother, she was heartbroken. Just another store with oversized prices and sizes that never fit the adverage person. My daughter was not over weight but yes athletic, that should not be percieved in a child's eyes as FAT...
Reply
6-18-2009 @ 1:08PM
michaelad567 said...
I agree completely, I'm 16 and I cant even WEAR kids clothes because their so ill fitting. You have to be about 12 for them to fit you, or a size 2.
6-18-2009 @ 9:20AM
Jon said...
After I heard that Abercrombie and Fitch had a racist Asian t-shirt, I vowed I'd never shop there. That and they tried their best not to hire minorities as sales-people because they catered to a particular crowd. As to the shutting down of the A&F chain, I say good riddance. They should've shut down a long time ago. A bad relic of the 90's. I agree - they should've gone out of business a long time ago. I guess those shutters in the storefront are fitting since it'll be easier for them to be boarded up.
Reply
6-18-2009 @ 9:25AM
james said...
Big A and F fan, LOVED the storefront, wish more stores would be as inventive or creative -- but did not like the style or the prices of Ruehl. I wonder if they will try to incorporate a section of Abecrombie for Ruehl -- which is maybe what they should have done to test the waters in the first place.
Reply
6-19-2009 @ 9:01AM
Rick said...
Can you explain to me what was "inventive" about the storefront??? both Rhuel and A&F stores. They both had dark tinted windows, with such terrible lighting you could not see what you were looking at, both chains have dark colored shutters on the windows that look exactly the same. and what you could see was the darkly shadowed acid wash jeans topped with the same token message tee at both stores. REAL INVENTIVE
6-18-2009 @ 9:27AM
anita said...
never even heard of this store..and we shop a&f all the time..
Reply