Dive Brief:

• With a $26.8 million bid, private equity firm Sycamore Partners has prevailed in the bankruptcy auction for The Limited Stores’ intellectual property, including its e-commerce business, sources told Reuters. The deal awaits approval from a U.S. bankruptcy court judge.

• Sycamore 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, and on Tuesday outbid apparel company Sunrise Brands LLC, Reuters said. The value of Sunrise's bid had to eclipse Sycamore's by at least $1 million to meet the requirements of the bankruptcy court, according to an earlier report.

• The Limited shuttered all 250 stores and its website before filing for Chapter 11 bankruptcy protection last month, beset by falling traffic and debt from its previous private equity ownership. 

Dive Insight:

Sycamore Partners, a private equity firm specializing in retail investments, has a portfolio that includes Belk department stores, Hot Topic, Nine West and Talbots — and now The Limited. Most recently, Sycamore made headlines in the retail space when it urged Aeropostale to liquidate in October. Sycamore was owed some $150 million by the teen apparel retailer, who eventually came back from the brink buoyed by a surprise joint bid from a consortium of mall landlords.

Private equity control can be tricky business for retailers. The Limited's previous private equity owner, Sun Capital Partners Inc., earlier this year told its investors that despite the closures, it had nearly doubled its Limited Stores investment. Due to prior distributions and dividends, Sun Capital made back its original $50 million 1.8 times over and will write down the remaining equity value of Limited Stores to zero.

While it seems clear Sun Capital didn't address the needs of its adopted chain, the seeds of The Limited’s demise were planted decades earlier, when the retailer took aim for Ann Taylor’s market of well-dressed professional women, among other critical changes, says 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.

The brand was exacerbated when founder Les Wexner, CEO of L Brands, in 2007 sold the enterprise, which launched his retail empire in 1963 as a sole store in Columbus, OH. “All of a sudden, you took that brand and gave it a different target customer,” Peterson told Retail Dive. “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 Les.”

In recent months, as The Limited's time ran out, it was also missing direction from its top executives: CEO Diane Ellis left to become president of women’s apparel brand Chico's in October after less than two months in that position. Then John Buell, who was elevated from his CFO role to interim CEO, abandoned ship in late December to become the senior vice president and CFO of fashion and home decor brand Altar’d State.