Struggling specialty apparel retailer Limited Stores is preparing to file for bankruptcy in the coming weeks and will most likely liquidate its business, Bloomberg reports.
The company has some $100 million in debt, sources told Debtwire. Private equity firm Sun Capital owns the struggling chain, but private equity firm Cerberus Capital Management is its largest lender, sources told the New York Post last month; that sets up a potential clash of interests as the retailer’s fate unfolds.
News of The Limited Stores’ continued efforts to prepare for restructuring, a sale or ultimately liquidation comes at a time when executives are missing from its CEO and CFO posts. John Buell, elevated from his CFO role to become interim CEO when CEO Diane Ellis left to become president of women’s apparel brand Chico's in October, also left the company last week. Buell abandoned ship to become the senior vice president and CFO of fashion and home decor brand Altar’d State
At the time, Limited Stores said without a CEO or a CFO its “existing executive team is working collaboratively on management of the company’s operations, and senior financial team personnel are continuing to oversee finances.”
The company also recently notified the Ohio Department of Job and Family Services that it may lay off as many as all 248 employees, including its entire headquarters staff, and close down that Columbus, OH-area office as it struggles with plummeting sales.
The retailer is a shadow of its heyday as a successful speciality mall retailer. Former parent L Brands (owner of Victoria’s Secret and Bath & Body Works) sold a 75% stake in The Limited to private equity firm Sun Capital in 2007; three years later, Sun acquired the remaining 25% stake. But some malls, themselves suffering from falling foot traffic as e-commerce sales rise, aren’t always especially helpful to stores like The Limited, which has 243 stores across the country.
Limited Stores has hired RAS Management Advisors to advise on strategic and financial alternatives, including a potential restructuring, sources familiar with the matter told Debtwire, and the company has also hired Kirkland & Ellis as its legal adviser, according to Bloomberg. The Limited, Guggenheim Partners and RAS Management didn’t respond to requests for comment.