Limited Brands, Inc.
Carrie Beasley
Susan Mitchener
Jill Nicholson
Jessica Whitesell
Executive Summary


4,600 stores throughout US
Apparel Stores:




The Limited
Express
Henri Bendel
Intimate Brands


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Victoria’s Secret
Bath & Body Works
White Barn Candle Co.
Executive Summary
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Leslie Wexner, Founder & President
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First store opened in 1963
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Publicly held company-1969
Vision and Mission
Vision
“Limited Brands has long been recognized as a
value-based organization. We are committed to
building a culture that fosters mutual respect,
open communication and sharing. As an
enterprise, we have chosen to live our
professional lives by this philosophy…we
consistently try to do what’s right. This behavior
manifests in how we treat each other, how we
treat customers, and how we support the
communities in which we live and work. That’s
what makes me so proud of the women and
men who represent Limited Brands.”
Vision and Mission
Mission Statement:
“Limited Brands is committed to
building a family of the world’s best
fashion brands to create sustained
growth of shareholder value by
focusing its time, talent, and capital on
the highest return opportunities”
Assessment of
Remote Environment
 Economic
Factors
 September 11, 2001
 Corporate scandals
 Rise in unemployment
rates
Remote Environment
 Social Factors


Increase in working
women
Sweatshop labor
Remote Environment
 Political
Factors
World Trade Organization
 Technological
Factors
Limited Technology Services
Analysis of Industry
Porter’s Five Forces

Threat of Entry

Powerful Suppliers

Powerful Buyers

Substitute Products

Jockeying for Position
Profile of Competitors

Gap♦ more service
♦ less fashion forward

Sears♦ less service
♦ less fashion forward

T J Maxx♦ less service
♦ more fashion forward

Marshall’s♦ less service
♦ less fashion forward
Company Profile

Primary Activities

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Outsource their manufacturing to third world
countries.
Different Advertising and Promotion Strategies



Limited
Victoria’s Secret
Secondary Activities

Limited Technology Services has helped Limited
Brands unify and advance their corporate goals.
Limited Brands vs. Gap, Sears, TJX,
and Marshall’s
•Limited Brands’ sales are
increasing, but their competitors
hold the majority of the industry’s
market share.
• In 2003 Gap and Sears’ net
income were in the billions when
Limited Brands’ was in the
millions.
Limited vs. Gap
 Gap
has three main subsets of stores:
 Gap
 Banana
Republic
 Old Navy
Competitive Advantages
 Own
private label
 Strong unique brand names
 Victoria’s
Secret
 Bath & Body Works
NET SALES
Limited Brands Net Sales (In Millions)
Net Sales
(Millions)
9500
9000
8765
9080
8934
8423
8500
8445
8000
1999
2000
2001
Year
2002
2003
Income Statement
Income Statement 2003
Net Sales
Cost of Goods Sold
Gross Profit
Income from Operations
Income Taxes
Net Income
Limited Brands
8,934
(5,683)
3,257
GAP
15,854
(9,886)
5,968
Sears
41,124
(26,231)
14,893
1,166
(499)
$717
1,683
(653)
$1,030
5,449
(2052)
3,397
Net Income
Limited Brands
GAP
Sears
2003
2002
2001
717 M
1.03 B
3.39 B
502 M
477 M
1.37 B
519 M
(7.76 M)
735 M
“Our financial strength gives us the ability to capitalize on
opportunities as they present themselves”
Ratios
Limited Brands
GAP
Sears
3.2
2.6
1.3
.31
.26
.29
9.4
9.3
7.7
Net Profit Margin
.08
.06
.08
ROA
.09
.09
.12
ROE
.13
.21
.53
Liquidity:
Current
Leverage:
Debt-to-Total Assets
Activity:
Inventory Turnover
Profitability:
Critical Issues

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The competition maintains a larger percentage
of the market share than Limited Brands.
Limited Brands may continue to lose market
share to established and new competitors.
TJX and the Gap are gaining market share at a
greater rate than Limited Brands
Changing men’s brand image
Very diverse company, so they must remain
competitive in all aspects
Core Issue
Limited Brands needs to build brand
awareness in order to increase
shareholder value by selling weaker
companies in order to focus on
strengthening the more profitable
companies.
Long-Term Objectives


Create sustained growth of shareholder value
by focusing its time, talent, and capital on the
highest return opportunities
Build brand name by selling underperforming
stores to strengthen the higher profitable
companies.
Key Assumptions

Apparel will continue to be a major part of the retail
industry.

Merchandise must continue to match trends in order
for Limited Brands to remain profitable.

More competitors will enter the industry.

Existing competitors will likely grow and expand
their market shares.
Scenarios

Best Case

Worst Case

Most Likely Case
Thank You
Any Questions?