Dive Brief:

• Struggling apparel retailer The Limited filed for Chapter 11 bankruptcy on Tuesday in a Delaware bankruptcy court and has agreed to a stalking horse bid for its intellectual property and some related assets from an affiliate of private equity firm Sycamore Partners, Reuters reports.
• The retailer, which announced earlier this month it had closed all its stores, is evaluating strategic alternatives for its e-commerce business and intellectual property, according to a letter to investors disclosed on Friday by Sun Capital Partners Inc, the retailer’s private equity owner.
• After inventory blowout sales following the holiday season, The Limited officially closed all 250 stores nationwide two weeks ago, with the apparel retailer continuing its operations online. 

Dive Insight:

“This isn’t goodbye…” The Limited promised its customers just a few weeks ago when it abruptly shuttered its remaining some 250 stores and moved operations exclusively online. But as the retailer moves through bankruptcy, it very well may spell the end for the company.

The women’s apparel retailer closed out 2016 as a shadow of its former self, beset by falling traffic and offering styles that can also be found at rivals like Loft and at department stores. Some malls, themselves suffering from falling foot traffic as e-commerce sales rise, aren’t always especially helpful to stores like The Limited. The retailer's appeal may have been muddled​ further by its recent “Backroom” off-price effort.​

In the midst of the troubles, the retailer was missing 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.

The bankruptcy news won’t come to a surprise to the industry, considering The Limited’s ongoing public plans for restructuring, hopes for finding a buyer and previously reported plans for bankruptcy. The apparel retailer was once top of mind for women seeking stylish business attire, yet the retailer’s struggles are also far from a recent downturn. In fact, the seeds of its demise were planted decades ago when the retailer took aim at Ann Taylor’s market of well-dressed professional women, among other critical changes, according to 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.

“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 (Leslie Wexner, the company’s founder).”

Ironically, The Limited ultimately fell victim to the fast fashion philosophies it helped pioneer. “With Limited, one of the bigger challenges for them was the fast fashion industry and how quickly the fashion came into the marketplace,” Shelley E. Kohan, vice president of retail consulting at store analytics firm RetailNext, told Retail Dive. “They kind of missed it and weren’t able to keep up with the quickness of the industry. I don’t think the stores — the experience or the merchandise — was as relevant as some of the other places in the market. It was a challenge for them to capture the millennial market.”