Struggling retailer Limited Stores has warned of mass layoffs in its New Albany, Ohio, headquarters as it seeks a buyer and contemplates an outright closure.
In a filing last week to Ohio’s Department of Job and Family Services, Larry Fultz, executive vice president and chief operating officer, warned regulators that the job cuts could begin as early as last Friday and that it was possible all 248 employees at the central office could lose their jobs.
“Product misses and massive shifts in retail shopping trends have been especially difficult for the company’s business, and the company is dealing with significant debt obligations,” Fultz said in a letter to employees that was attached to the filing. “We have now determined that the combination of sales misses and the level of existing financial obligations will require that the company be sold or we will have to wind down our operations due to an anticipated lack of operating capital.”
This confirms a Nov. 21 report in WWD that Limited was seeking a buyer and that it was possible the company could ultimately liquidate operations.
Fultz said the retailer was “earnestly pursuing additional sources of liquidity and exploring a potential sale of the company” and was considering bids from potential buyers.
He said that it was possible no deal would come or that the company might be purchased, but that the new owner would wind down operations.
“Based on the best information currently available, please be advised that it is anticipated that layoffs will begin as early as the week ending December 2, 2016 or within the 14 days immediately thereafter,” Fultz said.
In 2007, private equity firm Sun Capital Partners acquired 75 percent of Limited in exchange for a $50 million investment and a $75 million credit line. The investor acquired the rest of the retailer three years later.
Sun first bought into Limited in what was a different age for retail. The financial crisis was still in the future and e-commerce, while still all the buzz, was still much more of a novelty. In recent years, traffic to specialty stores like the Limited has fallen dramatically as chains have struggled to grab the attention of their smartphone-obsessed shoppers.
Neither Fultz nor a spokesman for Sun could be reached for comment Monday afternoon.
Guggenheim Securities was hired to find a buyer for the retailer and last month Limited acknowledged it was “exploring a number of options that would provide the company with greater financial flexibility.”
The retailer, which had once been part of Leslie Wexner’s retail empire at what is now called L Brands Inc., operated 186 stores as of July.