The Limited may file for bankruptcy in 2017, according to reports, but the company is taking major decisions to prevent such event from happening.
John Buell, named interim CEO of struggling women’s apparel retailer The Limited in October, Buell, a 13-year veteran of The Limited, was elevated from his CFO position to the top spot after CEO Diane Ellis left to become president of women’s apparel brand Chico’s.
This leaves the Limited Stores without a CEO or a CFO, for the struggling company,amid plummeting sales and crushing debt. The New Albany-based retailer, which has 243 stores across the country, was formerly owned by L Brands (owner of Victoria’s Secret and Bath & Body Works), had earlier in the month considered to close the chain and lay off all 248 employees at the corporate offices in New Albany. Other indicators have been alarming. A sign outside of a Limited store over the weekend promoted 70 percent off on many items, and the company’s website has been offering 80 percent off on jackets and skirts, the kinds of discounts more associated with a liquidation sale than with Christmas shopping season.
“As online sales of apparel continue to rise, pressure on malls to revive or shutter is increasing, vexing specialty retailers like The Limited that are so dependent on their customer appeal.” Retail analyst Jan Kniffen Thursday said on CNBC’s “Squawk Box” that e-commerce sales will reach 50% of apparel sales in a dozen years or so, and that brick and mortar retail will have to adjust by closing stores.
This leaves a evolve-or die scenario where some companies has been quick to respond. Pier 1 Improts, Inc closed 33 stores last year and reported a net sales loss of 0.4% in the 3rd Quarter. However it has much to smile about as it is booming from its strong e-commerce boost with sales increasing 28% to $97.4 million. Aided by strong marketing and its new gift registry, new interim CEO Appoints Terry London Interim President and the chief executive can call upon positive third quarter earnings reports. Announcing an increase of 280 basis points to 41.3% in gross profit as a percentage of net sales, corresponding with an earning of 17 cents per share beating the company’s own projections and representing an increase compared with the 13 cents per share in the third quarter of last year. London issued a statement concentrating on customer service: “We are pleased with our performance thus far in the holiday season and remain focused on the merchandising, marketing and customer engagement initiatives that helped drive our strong third quarter financial results”.
Conlumino CEO Neil Saunders said the retailer ”is now on a much more positive trajectory. In our view Pier 1 deserves some credit for the changes it has been making,”
Clearly, competition leaves the stakes higher than ever, and with the rise of discount stores and online sales, companies must move quickly in order to even stay afloat.