(Reuters) - Limited Stores LLC, parent of U.S. women's apparel chain The Limited, said on Tuesday it filed for bankruptcy, the latest brick-and-mortar retailer to reorganize as shoppers shift to fast-fashion retailers and online competitors.
Retailers Aeropostale Inc and Pacific Sunwear of California Inc filed for bankruptcy last year.
Limited Stores said it also agreed to a "stalking horse" bid for its intellectual property and some related assets from an affiliate of private equity firm Sycamore Partners.
A "stalking horse" bid is a starting or minimum bid for an asset of a distressed company from a bidder chosen by the company. Such bids are aimed at preventing low bids for a distressed company's assets.
Limited Stores, which filed for Chapter 11 protection in the Delaware bankruptcy court, said on Friday it would close all its about 250 brick-and-mortar stores, effective Sunday.
Sun Capital Partners Inc, the private equity owner of Limited Stores LLC, disclosed on Friday in a letter to investors that Limited Stores is evaluating strategic alternatives for its remaining e-commerce business and intellectual property.
Sun Capital, which acquired a majority stake in Limited Stores in 2007 and bought the rest in 2010, also disclosed it had nearly doubled its investment in the company.
The reorganization plan and the asset sales are subject to approval from the bankruptcy court, Limited Stores LLC said.
Klehr Harrison Harvey Branzburg LLP is The Limited's legal adviser, while RAS Management Advisors LLC is its restructuring adviser. Guggenheim Securities LLC is the investment banker for the restructuring.