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US womenswear retailer The Limited just closed all its stores

 

Limited Stores owner Sun Capital Partners disclosed it has almost doubled its investment in the troubled US womenswear retailer even as it announced it was shuttering all 250 brick-&-mortar stores.

In a letter to investors seen by Reuters, the private equity owner said Limited Stores is evaluating strategic alternatives for the retailer’s remaining e-commerce business and intellectual property.

Alongside the closures, some 4,000 jobs, including 800 full-time permanent positions, are eliminated, according to people familiar with the company’s plans, who were not authorised to discuss the matter with the media.

A spokesperson told the Associated Press that the company will shut its stores “by January 8”, yet as far as back December, The Limited began laying off employees at its New Albany, Ohio headquarters.

In a message to customers on Friday, the retailer said “this isn’t goodbye,” but that it was closing all of its brick-and-mortar locations. The retailer’s website includes a ‘50% off everything sale’, and said all purchases would be final.

Limited Stores declined to officially comment. However, back during Thanksgiving the brand did admit to suffering from shipping problems with consumers.

 


Sun Capital Partners told investors in the letter seen by Reuters that it has made 1.8 times its $50m investment in the retailer. It also said in the letter that it is writing down the remaining equity value of Limited Stores to zero.

The disclosure illustrates how private equity firms can boast a profit from companies whose equity value has been wiped out, having previously recouped their original investment by taking dividends from these companies, often by having them borrow more money to fund the dividends.

“We have worked very hard and made significant investments over nine years to improve operations and create a sustainable business at The Limited,” Sun Capital told Reuters in an emailed statement.

“In an increasingly challenging environment for mall-based retail and women’s apparel, we are very disappointed that the company has had to make the difficult decision to close its retail locations,” Sun Capital also said.

 

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Sun Capital acquired a majority stake in Limited Stores in 2007 and bought the rest of the retailer in 2010.

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  • Michelle Leigh

    Wow I am so surprised to hear this. I know a lot of retailers are struggling, but I had no idea that The Limited was in this position. I hope the e-commerce business keeps up. I know a lot of people love to shop online, but I will always be that old school consumer that loves to shop in stores. Trying on clothes in the store is one of my favorite things to do and just touching all of the merchandise and choosing what to try on is part of the fun!

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