Limited Brands, Inc.

1
Limited Brands, Inc.

• Carrie Beasley
• Susan Mitchener
• Jill Nicholson
• Jessica Whitesell

2
Executive Summary

• 4,600 stores throughout US
• Apparel Stores
• The Limited
• Express
• Henri Bendel
• Intimate Brands
• Victorias Secret
• Bath Body Works
• White Barn Candle Co.

3
Executive Summary

• Leslie Wexner, Founder President
• First store opened in 1963
• Publicly held company-1969

4
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 philosophywe consistently try to do whats
  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. Thats what makes me so proud of the women
  and men who represent Limited Brands.

5
Vision and Mission

• Mission Statement
• Limited Brands is committed to building a family
  of the worlds best fashion brands to create
  sustained growth of shareholder value by focusing
  its time, talent, and capital on the highest
  return opportunities

6
Assessment of Remote Environment

• Economic Factors
• September 11, 2001
• Corporate scandals
• Rise in unemployment rates

7
Remote Environment

• Social Factors
• Increase in working
• women
• Sweatshop labor

8
Remote Environment

• Political Factors
• World Trade Organization
• Technological Factors
• Limited Technology Services

9
Analysis of Industry

• Porters Five Forces
• Threat of Entry
• Powerful Suppliers
• Powerful Buyers
• Substitute Products
• Jockeying for Position

10
Profile of Competitors

• Gap? more service
• ? less fashion forward
• Sears? less service
• ? less fashion forward
• T J Maxx? less service ? more fashion forward
• Marshalls? less service ? less fashion forward

11
Company Profile

• Primary Activities
• Outsource their manufacturing to third world
  countries.
• Different Advertising and Promotion Strategies
• Limited
• Victorias Secret
• Secondary Activities
• Limited Technology Services has helped Limited
  Brands unify and advance their corporate goals.

12
Limited Brands vs. Gap, Sears, TJX, and Marshalls

• Limited Brands sales are increasing, but their
  competitors hold the majority of the industrys
  market share.
• In 2003 Gap and Sears net income were in the
  billions when Limited Brands was in the
  millions.

13
Limited vs. Gap

• Gap has three main subsets of stores
• Gap
• Banana Republic
• Old Navy

14
Competitive Advantages

• Own private label
• Strong unique brand names
• Victorias Secret
• Bath Body Works

15
NET SALES
16
Income Statement
17
Net Income
2003 2002 2001 Limited Brands 717 M 502
M 519 M GAP 1.03 B 477 M (7.76
M) Sears 3.39 B 1.37 B 735 M
Our financial strength gives us the ability to
capitalize on opportunities as they present
themselves
18
Ratios
Limited Brands GAP Sears Liquidity Current
3.2 2.6 1.3 Leverage Debt-to-Total
Assets .31 .26 .29 Activity Inventory
Turnover 9.4 9.3 7.7 Profitability Net Profit
Margin .08 .06 .08 ROA .09 .09 .12 ROE .
13 .21 .53
19
Critical Issues

• 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 mens brand image
• Very diverse company, so they must remain
  competitive in all aspects

20
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.

21
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.

22
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.

23
Scenarios

• Best Case
• Worst Case
• Most Likely Case

24
Thank YouAny Questions?