Wall Street criticized Abercrombie & Fitch for taking so long to close Ruehl
September 7th, 2009 by abercrombie0818Hollister has secured a 8,200-ft2 store at Victoria Square, joining names such as Cruise, Ted Baker, Reiss, Firetrap, All Saints, Urban Outfitters, Top Shop, River Island, H&M and Levis. Multi Development, who developed Victoria Square, recently announced that Kurt Geiger and the new denim brand J Four, have also signed for stores within the 850,000-ft2 scheme anchored by House of Fraser. Multi Development UK’s Director of Leasing, Stuart Harris said, “Signing the first Hollister store for Ireland is a great coup for Victoria Square and further endorses the scheme’s quality and position as the number one destination for fashion conscious Northern Islanders. Since opening in March 2008 Victoria Square’s following has continued to grow as it matures and settles in the Belfast and Northern Ireland shoppers psyche. The scheme has also hugely benefited from trade from Southern Ireland due to the strength of the Euro against the pound and this will be another strong pull.”
A Hollister representative said, “We’re excited to bring our Irish fan-base their first Hollister store where they can go and experience the brand first hand. Hollister is all about the fantasy of Southern California. We’re bringing SoCal to Ireland!”
Hollister is a lifestyle brand that embodies Southern California and operates over 500 stores across the globe, in addition to hollisterco.com. Hollister is a division of Abercrombie and Fitch (NYSE: ANF), a leading specialty retailer founded in 1892. With over 1,100 stores across the world, Abercrombie & Fitch offers five distinct lifestyles through its Abercrombie and Fitch , Abercrombie , Hollister Co., Ruehl, and Gilly Hicks divisions.
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.
A student who worked for U.S. retailer Abercrombie & Fitch Co. in London said Wednesday she was discriminated against because she has a prosthetic arm.
Riam Dean is seeking up to 25,000 pounds ($41,000) in damages at an employment tribunal.
Dean, a 22-year-old law student at the University of London, told the tribunal she worked at Abercrombie’s store on London’s posh Saville Row and had been given permission to wear a sweater to cover her prosthetic arm.
After a few days Dean said she was told she was breaking the company’s “look policy” and was asked to work in the stockroom.
Dean said the company gave new employees a thick guidebook dictating everything from how employees should wear their hair to the length of their fingernails.
“I have worn a prosthetic arm since I was 3 years old,” she said. “It was part of me, not a cosmetic.”