The private equity owner of the Limited almost doubled its investment in the retailer, despite the fact that nearly all of the chain’s 250 stores are expected to be shut down after disappointing third quarter financial numbers last month.
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 Limited 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.”
It looks as though Sun Capital Partners, which owns the chain, is taking the Limited in another direction.
According to Fortune, Sun Capital Partners sent a letter to investors explaining that it had invested 1.8 times its $50 million investment in Limited stores. The disclosure outlines how the private equity firm will still be able to garner a profit from the investment, despite the fact that the equity value of Limited has been written down to zero.
“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,” the statement continued.
All brick-and-mortar locations of the Limited will be closed effective Jan. 8. The Limited’s website continues to display deep discounts and a change in the return policy: “All sales are final.” However, it’s not clear how long the retailer will continue to sell items online.