Sun Capital to acquire Limited Stores for $125m

Boca Raton, Florida-based Sun Capital Partners will acquire women’s clothing retailer Limited Stores, as its parent company transitions to a focus on beauty and lingerie.

Boca Raton, Florida-based Sun Capital Partners has announced an agreement to acquire a 75 percent stake in the Limited Stores chain of Limited Brands. Although Sun Capital did not disclose the terms of the deal, Reuters reported that it will be financed with $50 million (€37 million) of equity and $75 million of debt, and is expected to close in the next 30 days.

In a statement released today, Sun Capital vice president Aaron Wolfe cited the company’s iconic status and loyal customer base as motivations for the purchase.

The retail sector accounts for 35 percent of Sun Capital’s portfolio, which includes department store Mervyns and Ontario, California-based Anchor Blue Retail Group. Last November Sun Capital partnered with Golden Gate Capital, a private equity firm based in San Francisco, to buy apparel retailer Eddie Bauer for $614 million.

Sun Capital closed its sixth fund on $6 billion this April. Eighty percent of that capital is earmarked for North America, while 15 to 20 percent will be allocated to Western Europe and 2 percent to Japan. The firm focuses on investments in turnarounds with revenues ranging from $50 million to $4 billion.

Limited Brands simultaneously announced the finalisation of the sale of a 75 percent stake in its Express chain to Golden Gate for $602 million. Limited Brands noted in a statement that its focus has “evolved” from apparel to personal care, beauty, and lingerie. The company also owns Victoria’s Secret, Bath & Body Works, C.O. Bigelow and White Barn Candle Co., among other brands.

Banc of America Securities advised Limited Brands on the sale.