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Limited Action

An empire changes direction. In the fashion business, there can be no sacred cows. No one knows that better than Leslie H. Wexner, chairman and chief executive of Limited Brands Inc.

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WWD Year In Fashion issue 2007/12/11
An empire changes direction.

In the fashion business, there can be no sacred cows.

No one knows that better than Leslie H. Wexner, chairman and chief executive of Limited Brands Inc.

For Wexner, it was emotionally tough to sell off his Limited Stores and Express apparel chains — two businesses that he founded and nurtured into national specialty powerhouses and that helped make him a multibillionaire.


View the full coverage of  WWD Year in Fashion 2007 at www.wwd.com/yearfashion07

For years, Wexner refused to acknowledge he would consider shedding Limited and Express, even as they lost market share and relevance with consumers and investor pressure mounted. Attempts to turn around and reincarnate Express and Limited Stores never really took. Ultimately, the businesses became such a drag on the corporation and distracted from pumping up and realizing the value of the bigger and more vibrant Victoria's Secret and Bath & Body Works divisions that Wexner bit the bullet and gave up his babies.

In July, Limited Brands completed two deals to sell off 75 percent stakes in Express and Limited Stores to Golden Gate Capital and Sun Capital Partners, respectively. After the deals were done, there was no admission of defeat. The company's apparel brands, which once accounted for more than 70 percent of revenues, represented less than 20 percent of Limited Brands' annual revenues of $10.7 billion. Limited Stores had sales last year of $493 million, and Express had revenues of $1.7 billion, with Victoria's Secret and BBW accounting for the bulk of sales.

In front of analysts, Wexner expressed relief, not remorse, and spoke of the strategic benefits of being apparel-free to focus on the lingerie, beauty and personal care units, though Victoria's Secret still has a substantial stake in sportswear, jeans and accessories.

"Happily," he told the analysts in October at a conference in Columbus, Ohio, where Limited Brands is based, "we are not in apparel specialty retailing. That was a concern for many of you and us for many years. I am delighted we don't have apparel retailing stores and that we are as dominant and significant in the categories we are in. Brand loyalty to beauty and lingerie is very different than loyalty to apparel. Because of that loyalty, we get trial and repeat [business] in a way that apparel does not get. It's a very different pattern of purchasing behavior.
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