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The Limited shutters its online operations

January 24, 2017 03:58 PM
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Apparel retailer Limited Stores LLC is officially done selling online–for now.

TheLimited.com features a message on the homepage informing visitors that “All orders that have not already shipped have been cancelled. You will not be charged if your order has not shipped.” The site does not indicate when that message first appeared, but it has been up since at least Monday evening.

The Limited, No. 216 in the Internet Retailer 2016 Top 500 Guide, last week filed for Chapter 11 bankruptcy and said its site was down temporarily and that customers should check back soon.

The current iteration of TheLimited.com mentions the privately held retailer’s bankruptcy filing and has links shoppers can click to manage their Limited credit card account, learn about the retailer’s return policy, as well as access the retailer’s bankruptcy documents. A representative for The Limited did not return a request for comment.

The Limited is far from alone as far as mall-based apparel retailers filing for bankruptcy go. American Apparel Inc. (No. 338) has filed for bankruptcy twice, first in October 2015 and then again this past November, and some of its assets were bought earlier this month for $88 million by Canadian T-shirt and underwear maker Gildan Activewear Inc. Aeropostale Inc. (No. 154) filed for Chapter 11 in May. Wet Seal Inc. filed for bankruptcy in January 2015.

“The whole segment is in the tank,” says Howard Davidowitz, chairman of retail consulting firm Davidowitz & Associates Inc. “Malls are terrible. We’re overmalled (meaning he thinks there are too many malls in the United States) and add to that the explosive growth in online [sales]. When you put all that together, there’s only one thing you’re going to see–a tremendous amount of bankruptcies and closed stores.”

The Limited grew its online sales to $130 million in 2015, up 18.2% from $110 million in 2014, according to Internet Retailer’s Top500Guide.com. But The Limited’s problems weren’t tied to its e-commerce operations but to its physical stores.

 “The people in the off-price apparel business are booming,” he says. “The people in the full-price mall stores are in the tank. Their stores are too big, the malls are bad, Limited stores are too big for what they were doing.”

Lauren Freedman, senior vice president of digital strategy and chief merchant with Astound Commerce, says the retailer misread its audience.

“Unfortunately for them, the market passed them by,” she says. “The Limited store was 'cool' in the ‘90s but never kept up with the times. The price point was always on the high end. Younger women joining the workforce began to look to Zara and H&M for more affordable/ trendier work apparel.” According to Top500Guide.com, The Limited had an average online order value of $100 in 2015, compared to a $77 average online order value for H&M.

While The Limited is not currently operating, it may return in the future, Davidowitz says.

“Somebody will buy the name and it will pop up online somewhere,” he says. “That’s the final step. The stores will be closed, someone will buy the name and The Limited will be back online.”

Whoever buys the brand will have a head start over someone starting a new clothing brand because a buyer will acquire the company’s email list of customers who have bought from them in the past or expressed interest in receiving promotional emails, Davidowitz says. “You have to market to somebody,” he says. “Getting that data gets you off to a running start. That’s why you’re going to pay to acquire The Limited. Somebody’s going to pay.”

Freedman and Davidowitz agree that a revamped version of The Limited would need to develop better products that set it apart from the competition.

“They will need to make the assortment trendier, more ‘disposable’ and a reasonable price point,” Freedman says. A buyer will have to “think long and hard about who their customer is, their competitors and the changing retail landscape to have a chance.”

“If the merchandise is exciting, everybody will get excited within a year,” Davidowitz adds. “That is easier said than done because all of these apparel chains out there. The chances of doing that are not so big. This is not a simple task.” 

 

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