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mahatmakanejeeves

(56,886 posts)
Sat Jan 7, 2017, 09:17 PM Jan 2017

The Limited Owner Almost Doubles Investment

Source: Reuters, via Fortune

The Limited Owner Almost Doubles Investment

Reuters
Updated: Jan 07, 2017 3:51 PM UTC

Sun Capital Partners Inc, the private equity owner of Limited Stores LLC, disclosed on Friday it has almost doubled its investment in the troubled U.S. women's apparel retailer, even as it announced that it will shut all approximately 250 The Limited stores amid losses.*

Sun Capital Partners told investors in a letter that it has made 1.8 times its $50 million investment in Limited Stores, thanks to prior distributions and dividends, according to an email to investors seen by Reuters.

Sun Capital also said in the letter that it is writing down the remaining equity value of Limited Stores to zero.

The disclosure illustrates how private equity firms can boast a profit from companies whose equity value has been wiped out, having previously recouped their original investment by taking dividends from these companies, often by having them borrow more money to fund the dividends.

* http://fortune.com/2016/12/21/thelimited-bankruptcy/

Read more: http://fortune.com/2017/01/07/limited-sun-capital-closing/



Previously at DU:

The Limited is closing all remaining stores by Sunday; all online sales are final
17 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies

madaboutharry

(40,149 posts)
3. The Limited use to be a nice store.
Sat Jan 7, 2017, 09:37 PM
Jan 2017

They started buying up other clothing companies like Victoria's Secret and Bath and Body Works. They lost focus and the stores become a mess. There was a time clothes from The Limited were well made and would last several seasons. Then they decided to go into the "teenage disposable clothing business" and it all went downhill. It's kind of sad.

It always amazing me how some people figure out a way to make money off a sinking ship.

catchnrelease

(1,941 posts)
10. I used to love Limited
Sat Jan 7, 2017, 11:34 PM
Jan 2017

My friend and I would shop there all the time, in the 80s and 90s. Like you say, the clothing was very nice and usually on the pricey side. (We always shopped the sale rack, lol) I still have many pieces of clothing I bought from them, that I still wear. Same story with the GAP. Had cute sports wear that was well made. Then both stores changed their target market I guess. I know I got older, but what they started offering was just not appealing anymore. And just not the same quality. Sad.

Flatpicker

(894 posts)
11. I think
Sat Jan 7, 2017, 11:38 PM
Jan 2017

It's another one of those things when the investors buy up the name and then drain the value from the brand.

The Limited was doing ok until Sun got involved. Then the became part of that "brand family".

catchnrelease

(1,941 posts)
13. I'm sure you are right
Sat Jan 7, 2017, 11:50 PM
Jan 2017

I remember when Banana Republic was mainly travel type clothing and accessories, and well made. They went the same way as the ones mentioned above. Bought out by the people that have the GAP and now both have basically the same clothes. Crappy stuff from China and the value sucked dry so the investors can have more dividends.

CrispyQ

(36,225 posts)
17. I have lots of nice clothes from The Limited, including two coats.
Sun Jan 8, 2017, 01:23 PM
Jan 2017

Then I got a job where I could dress in jeans & tee shirts - bye, bye Limited! It's been a long, long time since they left the mall I shop at.

TeamPooka

(24,155 posts)
6. I love that movie. I grew up next to a "Tin Man" in CT in the 60s. The movie is very accurate.
Sat Jan 7, 2017, 09:59 PM
Jan 2017

He would sleep late, go to lunch at the diner, Elk's or Lion's Club.
Spent a lot of time at the track, OTB and Jai alai.
In high school he took me to Aquaduct for the day and Jimmy the Greek knew him by name.
So much drinking done by him and his buddies.
I worked for him part time in high school and I didn't install siding, he made me his driver because he hated it and could drink freely.
I have to re-watch that movie now.

turbinetree

(24,632 posts)
12. Barlett & Steele---------------take your pick from these two "investigative journalist"
Sat Jan 7, 2017, 11:44 PM
Jan 2017

they have pretty much explained why we are in this mess today and the law from 1949 for Hedge Funds

http://www.barlettandsteele.com/books/index.php


http://www.awjones.com/historyofthefirm.html




jgmiller

(383 posts)
14. This is what most PE firms do these days
Sun Jan 8, 2017, 12:08 AM
Jan 2017

They come in purchase an asset maximize the profits at the expense of the business and then sell it to another PE firm or shut it down once they've gotten everything out of it they can. From a pure profit standpoint I can't really say I blame them, it's what they do. Unfortunately this is the modern business world, very few large companies care about running a good business these days. There is no long term thinking in what they do.

 

Grey Lemercier

(1,429 posts)
15. Related:8 retailers closing 100s of locations in 2017 (when the Limited is added in it's 1554 total)
Sun Jan 8, 2017, 06:49 AM
Jan 2017
http://www.al.com/news/index.ssf/2016/12/8_retailers_that_are_closing_1.html#0

The Limited 250
Aeropostale 154
American Eagle Outfitters 150
Chico's 120
Children's Place 200 (on top of the 125 shut in 2016)
Macy's 100
Men's Wearhouse/Jos. A Bank 250
Office Depot 300
Sears and Kmart 30 (immediately, possibly hundreds more latter on, Sears alone has closed over 2 THOUSAND stores in last 5 years)


turbinetree

(24,632 posts)
16. And just think the venture vultures at Sun Capital get a tax break
Sun Jan 8, 2017, 12:40 PM
Jan 2017

from this, it's called a loss on the paperwork and the write-off generates more income flow to the top jerks, while at the other end of the pile this is whats happening to these human beings lost revenue to there social security benefit, because if some hedge fund ass**** decides to close the store and you have no job to go to, then when you get your statement from social security it shows how much you have earned and what your estimated outlay of the benefit will be, while the ass**** at the top will get the maximum benefit:

http://crooksandliars.com/2017/01/billionaires-celebrate-their-own-social




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