Abercrombie and Fitch To Close Ruehl

There are only 25 Ruehl stores in the US today, and anyone who has ever visited one will admit – its a VERY unique store. Instead of the storefront being floor to ceiling windows, it looks like a brick mansion that you’d find in Greenwich Village. Right down to the wrought iron fence, concrete walkway, subway/air grates and doors that look like they could come right from an a building in Greenwich Village. The inside is equally as impressive – the store is broken up into rooms, with a long hallway going down the center, dividing the womens and mens sections. The check outs are in the rear of the store – in a room that looks like it could be the garage, with exposed wooden beams and walls. Some rooms were even on different “floors” a good 2 or 3 feet higher than the other floor.abercrombie and fitch
The first quarter was clearly a difficult one for us. With a challenging economic environment, the consumer continues to show a reluctance to spend on premium brands; a price consciousness dictating shopping habits unlike anything I have ever seen…
Other “premium” brands – Express, Banana Republic, J Crew, and Martin & Osa to name a few – have done nothing but sell clothes for their regular price – but discount them down to almost half price, bombard email in boxes with one day sales, online sales, 30% off sales, I could go on and on. Those sales bring people in the doors, and make sales.
The amount of detail that was designed into these stores was amazing – and the prices of the clothes did reflect that, but it really made you feel part of the story, made you feel part of the clothes – made you part of the experience, something that you will never get at The Gap, or Express.
abercrombie and fitch’s downfall with Ruehl (and the considerable sales drop at other Abercrombie brands of late) came from their arrogance to refuse to acknowledge the state of the economy and price their clothes accordingly – or at the least, provide sales or discounts or specials. For almost a year now Abercrombie’s President and CEO, Mike Jeffries has continually stated that abercrombie and fitch (and affiliated concepts) are premium brands, discounting them or placing sales on their products – even temporarily – will damage the reputation of the brands and make it more difficult for the brands to return to their premium status. Then, suddenly, on May 15th, in their quarterly earnings report Jeffries made a comment which clearly demonstrates just how out of touch those people are in New Albany, Ohio with whats going in the retail environment today:
If you look at the quarterly results of those clothing companies – they aren’t as bad as Abercrombie’s have been and they have no intentions of closing any of these premium brands.. In fact, J Crew is still expanding their Madewell brand, Aeropostale is launching a new concept – PS, and Abercrombie is going full speed ahead with their Gilly Hicks brand. For those unaware of what Gilly Hicks is – it’s a women’s lingerie store, with pricing CONSIDERABLY lower than you’d expect to find at an abercrombie and fitch/Ruehl store, and a lot lower than a comparable item at Victoria’s Secret as well.
It’s unfortunate that Ruehl has to take the hit, because the concept was great, the feel of the store was great, the clothing was great – but the prices were just too high, and the management of the company too arrogant to gauge the market better.
Oh, and once – sometimes twice a week – I’m now getting emails advertising their “Summer Clearance” sales in the stores and online from all the Abercrobmie brands.. How ironic. Not the least of which we’re just heading into Summer now – and they’re already doing Summer Clearance.