Mall business model pushes Limited toward bankruptcy
American retailer The Limited is on the verge of bankruptcy. Bloomberg speculates that Limited Stores will file for bankruptcy within a few weeks.
This prediction follows a rough year for the women’s retailer. Earlier this month, Columbus Business First reported that The Limited sent a letter to a state government agency warning of mass layoffs for its entire staff and the shuttering of all its stores, stating the ‘mass layoff is expected to be permanent.’ In early December, The Limited's interim CEO John Buell, who succeeded Diane Ellis, stepped down from the company after just two months on the job.
The Limited has faced issues similar to those of other mall-based retailers, which have been struggling to retain customers. Trends show that customers no longer prefer to shop at malls but rather online.
According to retail traffic data measured by Prodco, North American malls have been suffering a gradual downturn in traffic for the past four years, with this year, even this season, being one of the worst.
Following this announcement, The Wall Street Journal reported Guggenheim has been brought on to assist in the asset sales. Kirkland and Ellis has been brought on as a legal advisor.
The Limited left the L Brands conglomerate, which currently own Victoria’s Secret, La Senza, and Bath and Body Works, in 2007 in a buyout by Sun Capital Partners Inc. At one point in the retailer’s history, it owned both Victoria’s Secret, Lane Bryant, in addition to a number of Abercrombie and Fitch locations.
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