The Wall Street Journalreports that struggling retailer Abercrombie & Fitch is going to shutter its 29 Ruehl clothing stores.
The company has reported month after month of dour sales results; Ruehl's same-store sales in May slumped 33%. Abercrombie as a whole hasn't reported sales growth since April 2008 and is increasingly shedding its no-markdown mantra, but is still losing out to cheaper competitors.
The retailer will record about $65 million more pre-tax charges in the remaining three quarters of this fiscal year. Chairman and Chief Executive Mike Jeffries said the company was confident it would continue to generate enough cash from operations to fund its liquidity needs.
Wall Street Strategies analyst Brian Sozzi wondered why it took the company so long to close Ruehl, saying retailers should learn from the unit's end that they shouldn't chase every age demographic.
Analyst Brian Sozzi also thinks Abercrombie should close its women lifestyle brand Gilly Hicks.
The Reuhl store closings are not a surprise because Abercrombie had already stated that Ruehl was a drag on earnings.
