A few weeks after announcing mass layoffs at its Ohio headquarters, The Limited is reportedly preparing to file for Chapter 11 bankruptcy and is likely to liquidate its business, according to Bloomberg.
When the layoffs started, the retailer revealed in a letter to employees that if it couldn’t find a buyer, it would shut the chain down due to a combination of missed sales targets and “significant debt obligations” that apparently reach $100 million, according to Debtwire.
The anticipated filing would put The Limited in the same company as other mall-based brands, including Aéropostale, American Apparel and Pacific Sunwear, all of which have filed for bankruptcy before reducing store counts.
The Limited has had a rough few months in terms of managerial stability as well, with former CEO Diane Ellis leaving the company in October to take over as President of Chico’s FAS. John Buell, the company’s CFO who had replaced Ellis as interim CEO, departed this month to become CFO at apparel retailer Altar’d State.
In November, the retailer hired Guggenheim Securities and RAS Management Advisors to help with debt restructuring and asset sales. While investment firm Sun Capital owns The Limited, lender Cerberus Capital Management would have to grant the firm permission before any restructuring can take place.
The Limited will continue to try to sell its assets after a possible bankruptcy filing in order to emerge and continue operating.