In its heady early days, The Limited was known for its effective merchandising, innovative retailing tactics, and stellar strategy. The founder and CEO Leslie Wexler had a reputation for sensing shifts in the market and adopting tactics that would meet those needs as they arose. Thus, when Wexler sold a majority of the shares of The Limited brand to a private equity investor, it was an early signal of where the brand was headed. Accordingly, the retailer recently announced that it would close all of its remaining stores. Wexler and the parent company, L Brands, have turned their attention to specialty brands such as Victoria’s Secret and Bath & Body Works, with the recognition that The Limited simply could not continue to compete with fast fashion powerhouses such as Zara and H&M. The challenge was particularly strong for The Limited, because when the brand received infusions of money from its private equity owner, it also took on substantial debt. In turn, revenues mostly go to service the debt, rather than to updating stores. The Limited thus entered into a downward spiral, in which it has failed to keep up with the times, producing a stale brand that could not earn enough to stay afloat. Although The Limited is notable in its complete closure, other competing brands, including Wet Seal, Aeropostale, and Pacific Sunwear similarly continue to struggle. They might be wise to take a look at whatever Les Wexler does next.

Source: Suzanne Kapner, The Wall Street Journal, January 10, 2017