Markets

Abercrombie's RUEHL Closings Stress Failure of Apparel Spin Offs

By Ian Ritter

Updated on: June 18, 2009 / 7:29 PM EDT / MoneyWatch

Abercrombie & Fitch recently announced it will pull the plug on its RUEHL chain, a concept with 29 stores in high-profile malls across the country that targeted well-heeled consumers in their 20s. Abercrombie blamed "the severe economic downturn" for sinking the stores, which launched in 2004, generating an operating loss of $58 million during the company's prior fiscal year.

But maybe it's not just the economy's fault in this case. REUHL is just another example long line of concepts rolled out by established chains over the last few years that were either closed or abandoned. The lesson here is that some of these retailers might be better off sticking to their core concepts instead of pushing ever more demographic-specific options out to the consumer.

Here's a quick look at some of these troubled spin offs:

Back in 2005, Gap Inc. hyped a concept called Forth & Towne geared toward women 35 and older. At that time, executives said it could become a significant chain, but after 19 locations, less than two years and $40 million, the concept folded.
In 2007 Ann Taylor Stores was geared to roll out a similar chain for the "modern boomer." At the time, executives were also very bullish on this idea. It never had a public name and never opened a store, and managment stopped pursuing its launch last year.
Pacific Sunwear of California last year pulled the plug on demo, a 230-unit urban-apparel line introduced in the 1990s.
In early 2008, women's retailer Talbots decided to close its 78 stores geared toward men and children -- men's was launched in 2003 and kid's a few years before. This move took place so that management could concentrate on its core chain of women's stores, which numbers at more than 1,300 units.
One concept that might get abandoned soon is Martin + Osa, launched by American Eagle Outfitters in 2005 currently with 10 stores. That chain, for men and women between 25 and 40, c ould discontinue if its financial performance doesn't improve soon, American Eagle executives said during a recent conference call.

In Abercrombie's case, executives said they were abandoning RUEHL to concentrate on its longer-standing Abercrombie and Hollister chains. Other retailers might also save time and money if they can back off on the new concepts and instead focus on improving existing brands, especially in this rough retail environment.