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Hard times are causing Abercrombie & Fitch Co. to close down one of its brands, including an e-commerce site. Abercrombie will shut down RUEHL.com and 29 stores by the end of the current fiscal year, the retailer says.
Hard times are causing Abercrombie & Fitch Co. to close down one of its brands, including an e-commerce site, the retailer says.
Abercrombie, No. 58 in the Internet Retailer Top 500 Guide, will shut down RUEHL.com and 29 stores by the end of the current fiscal year. RUEHL targeted younger shoppers with apparel and accessories that emulated a New York and Greenwich Village lifestyle.
Abercrombie, which saw its web sales decrease by 21.4% to $49.1 million in the first quarter and total and comparable-store sales in Q1 decline by 23.5% and 30%, respectively, says RUEHL generated a pre-tax operating loss of approximately $58 million for the fiscal year ended Jan. 31, 2009, including a non-cash impairment charge of approximately $22 million. To close down the brand, Abercrombie expects to take a pre-tax charge of approximately $65 million in addition to an earlier non-cash and pre-tax impairment charge of about $51 million.
"It has been a difficult decision to close RUEHL, a brand we continue to believe could have been successful in different circumstances,” says Abercrombie 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.”
Abercrombie launched RUEHL.com in October 2007 after opening several RUEHL stores in 2004. The brand featured men’s and women’s casual apparel, jeans and outerwear. Abercrombie’s other web sites include Abercrombie.com, AbercrombieKids.com, HollisterCo.com and GillyHicks.com.