It's been a long, painful year for shareholders of Limited Brands (NYSE:LTD). The apparel side of the business has not only struggled, but also management has used the words disappointed and embarrassed to describe the performance of its Express chain in the last two quarters. Those words may sound harsh, but with same-store sales down by double digits in each of the last four quarters, there's not really a better way to put it.

Limited isn't alone in its malaise, as the stocks of some other retailers, including Motley Fool Stock Advisor pick Gap (NYSE:GPS) and TJXCompanies (NYSE:TJX), have also had pretty rough years. But each situation is different. TJX has suffered from newer businesses that aren't pulling their weight, and Gap has struggled a bit with hitting the fashion mark, but Limited's problems are pretty much contained to its apparel division. In contrast, the company's Victoria's Secret and Bath and Body Works divisions have cruised along just fine.

The question now confronting value investors, and those with an income bent as well, is if the company's 3% dividend yield and relatively low P/E of 14.8 signal that most of the bad news is priced in and it's time to start buying shares.

There are positive signs that the business is reshaping itself. Over the last 12 months, total stores and total square footage are down 4.4% and 1.8%, respectively, but sales are up 2.4%. Earnings and free cash flow are down fairly dramatically vs. last year, but that's largely a function of store opening expenses, because Limited is still opening new stores even though the total number of stores is down. This is largely because of the change from individual Express Men's and Women's stores to combined dual-gender stores.

I'm not ready to buy shares yet, but the modest valuation, good dividend yield, and potential for continued growth in the personal care side of the business has me interested in digging deeper to understand the potential for a turnaround in the apparel side. In addition, if there is a good time for a retailer to stumble, or even fall on its face in the case of Express, it is certainly the first half of the year, with the all-important Christmas selling season still to come.

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Nathan Parmelee has a beneficial interest in shares of Gap, but has no financial interests in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy.