Mercy Killing: Abercrombie & Fitch Sheds Ruehl (Updated)

Abercrombie also said it amended its existing credit agreement to $350 million from $450 million, which excludes some of the Ruehl-related charges.

"This provides Abercrombie & Fitch with additional cushion, and speaks to the llimited visibility on future performance, even after excluding Ruehl," Meyer wrote.

Abercrombie & Fitch should end the year with about $700 million in cash, more than enough to fund liquidation, Jaffe wrote.

Analysts breathered a sigh of relief, as they have been calling for the closure of the chain. Jaffe said Ruehl had not only been a financial drag, but also a distraction to Abercrombie & Fitch's better-performing concepts. Aeropostale(ARO Quote)had already shuttered its money-losing Jimmy'Z chain in February.

Next on the chopping block? Hopefully American Eagle Outfitter's(AEO Quote) contemporary chain Martin + Osa, which has also been a drag on the company's performance -- not to mention overpriced for these trying times.