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The Limited may be first to file bankruptcy in 2017

By Sara Ehlers

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Business

American clothing company The Limited may be headed towards financial turmoil soon. The apparel retailer has been speculated to file for bankruptcy in the upcoming year.

The chain, which currently has over 240 operating stores, has dealt with declining business for the past couple of years. Since the company was bought by private-equity firm Sun Capital Partners Inc., it seems that the upscale clothing retailer has suffered as a result of mall shopping decline. As reported by Bloomberg, the company has retained Kirkland & Ellis as its legal advisor. In November, the Wall Street Journal confirmed that The Limited has hired Guggenheim Partners as a financial advisor as well. It’s possible that Guggenheim was hired due to the company seeing results from the declining mall traffic and preparing for the future.

Earlier this fall, Limited Stores did hint at a possible restructuring. “Limited Stores is exploring a number of options that would provide the company with greater financial flexibility,” a company representative told WSJ earlier this year in November. As it is only a month later, it seems that bankruptcy might be a more fitting alternative for the struggling company.

The Limited possibly headed towards bankruptcy in 2017

At the moment, Limited Brands and Sun Capital have not given a public statement on this matter. As other retailers have also continued to struggle to stay relevant in shopping, it’s not unlikely that The Limited is headed towards bankruptcy. In the last year, many U.S. companies felt the sting of mall decline and the impact of that on sales. Wet Seal, American Apparel, and Nasty Gal are all once successful companies that filed for bankruptcy due to these recent conditions. If confirmed, the possible bankruptcy could be as early as January 2017, making it one of the first to file in the new year.

According to the company website, the chain has approximately 243 stores within the U.S. Attained by Sun Capital Partners, Inc. in 2007, the mall-based specialty retailer offered womenswear apparel at various locations throughout the country. As reported by Fortune, it’s likely that the company will file within the next upcoming weeks.

Photo: The Limited

The Limited