The shift in strategy makes Frederick's the latest struggling retailer to leave behind the pricey operations of running physical stores, for the less cost-intensive world of online sales.
Read MoreWill this lingerie shop join the retail graveyard?
Earlier this year, teen retailer Delia's said it would wind down its store operations and sell its merchandise on the Web. The brands are taking a page from retailers such as Linens 'n Things and Sharper Image, which despite closing all of their stores in 2008 have survived as Web shops.
Read MoreRetail chains that disappeared
This isn't the first time Frederick's has faced financial troubles. The retailer filed for Chapter 11 bankruptcy protection in 2000, when it operated 200 stores and had a reported $70 million in debt. It emerged from bankruptcy in 2003 following a massive restructuring. After going public in 2006, the company was taken private eight years later, in a transaction valued at about $24.8 million.
"We look forward to entering this new phase of the company's history and having access to the capital resources needed to implement a turnaround strategy that can take full advantage of the Frederick's of Hollywood brand," then-Chairman and CEO Thomas Lynch said at the time.
Correction: Kate Spade Saturday items will not be sold on Kate Spade's website. An earlier version of this story said that they would.