Dive Brief:

• Clothing firm Sunrise Brands LLC, which runs apparel brands from celebrities like Eva Longoria and Melissa McCarthy as well as Seven7 Jeans and American Rag, has bid for The Limited Stores’ e-commerce business — the company’s sole retail business since shuttering all locations last month — and its other intellectual property, sources told Reuters. 

• Private equity firm Sycamore Partners last month put in a $25.75 million "stalking horse" bid for The Limited's intellectual property, which includes its trademarks, website address and social media accounts, setting the stage for an auction. The value of Sunrise's bid is presently unknown, but must eclipse Sycamore's bid by at least $1 million to meet the requirements of the bankruptcy court.

• The Limited filed for bankruptcy protection last month, beset by falling traffic and hamstrung by apparel styles that can also be found at rivals like Loft as well as department stores. 

Dive Insight:

The Limited was once a thriving apparel retailer with an agile merchandising approach and speedy supply chain. But like many largely mall-based retailers, falling foot traffic and rising e-commerce sales took their toll; The Limited's appeal may have been muddled​ further by its recent “Backroom” off-price effort, as well as the defections of key executives. (First CEO Diane Ellis left to become president of women’s apparel brand Chico's, then John Buell, who was elevated from his CFO role to interim CEO, abandoned ship to become the senior vice president and CFO of fashion and home decor brand Altar’d State.)

But in hindsight, The Limited began to stray from its merchandising and supply chain prowess and more or less abandoned its target customer even before founder and L Brands chief Les Wexner sold the chain to Sun Capital in 2010. Its private equity ownership may also have been a major factor, as investor concerns and a debt pile-up overwhelmed retail fundamentals.

“All of a sudden, you took that brand and gave it a different target customer,” Lee Peterson, who spent 11 years at The Limited and is now executive vice president of brand, strategy and design at global retail design firm WD Partners, told Retail Dive earlier this year. “And it’s the wrong target customer because it’s really changed and you’re not set up for it. And you changed the process of how you get product into the stores. And you lost [Wexner].”

The Limited's bankruptcy auction is slated for Feb. 21 in Philadelphia. Sycamore's retail portfolio already includes department store chain Belk, footwear and accessories retailer Nine West and e-commerce women's apparel brand Coldwater Creek. The PE firm last year bid on bankrupt teen apparel retailer Aeropostale in a bankruptcy auction last year, but lost out to a consortium including landlords Simon Property Group and General Growth Properties, liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, and licensing firm Authentic Brands Group.