After disappointing third quarter financial numbers, clothing retailer The Limited may be be going in another direction. Analysts speculate that layoffs are probable, but an acquisition, bankruptcy filing or a complete shuttering are highly likely.
On Nov. 28, the Limited brand filed a WARN notice with the Ohio Department of Job and Family Services, which included a statement that “a mass layoff” — up to 248 employees — will occur and that its headquarters may be closing in New Albany, Ohio. The letter was also sent to the company’s employees.
The company, however, hasn’t yet stated if layoffs have started, but the action was anticipated to occur at the beginning of December.
According to Bloomberg, the brand pulled in Kirkland & Ellis to be its legal adviser and Guggenheim Securities and RAS Management Advisors for help with a debt restructuring and any asset sale.
The letter, which includes a statement about “sales misses” and “very disappointing” third quarter results, said that the brand “will require that the company be sold, or we will have to wind down our operations due to an anticipated lack of operating capital.” Farther down the letter, it is written that the company is looking for a potential buyer, and if one is not secured, the operations of the company may be in jeopardy.
The Limited Stores told Internet Retailer in a statement:
“After a detailed and thoughtful review, management has made the difficult decision to separate a number of associates at the company’s headquarters in New Albany. This action enables us to focus our resources on the operation of our stores and eCommerce platforms while we continue exploring options to address these challenges and provide greater financial flexibility, including discussions with a number of interested buyers.”
The brand, which was founded in 1963 in Columbus, Ohio, includes a chain of stores, many of them in malls, as well as outlet stores and an eCommerce site. It was listed as number 216 on Internet Retailer’s Top 1000 guide and started selling online (through its site, TheLimited.com) in 2008. It is not publicly traded and typically does not release quarterly revenue. Back in February, the business said it grew more than 15 percent in 2015 (to around $130 million).
In October, the company’s CEO, Diane Ellis, departed for Chico’s FAS Inc, and EVP Jenn McClain left for iFLY Indoor Skydiving the following month.
Currently, visitors to its website will find headlining display stating deep discounts and a change in the return policy: “All Sales Are Final.” The company’s Facebook page has been responding to delivery delays.