Limited Brand Sells Express Stores
With lingerie and beauty products making up 70 percent of its revenues, Limited Brands Inc. has decided to shed its clothing stores to improve its profits.
The Columbus, Ohio–based company announced May 15 it was selling 67 percent of its Express stores for $548 million to San Francisco–based Golden Gate Capital, which has been on a retail buying spree lately, with its purchase of retailers including Draper’s & Damon’s, Spiegel, Appleseed’s and Norm Thompson Outfitters. The deal should close no later than July 6.
Leslie Wexner, founder, chairman and chief executive officer for Limited Brands, said Jay Margolis will remain Express’ chief executive. Limited Brands will retain a 33 percent share of the chain, which has 631 stores and generated $1.7 billion in net sales last year.
In addition, Wexner announced the company would be looking for someone to buy its 253 Limited Stores, whose net sales were $493 million in 2006.
The Ohio company plans to focus on its Victoria’s Secret lingerie chain and its Bath & Body Works stores, which generate the bulk of the company’s sales.
“As we have done with past transactions, we will continue to support Express through service agreements in various functions, such as sourcing and production, distribution and logistics, and information technology services,” said Martyn Redgrave, Limited Brands’ executive vice president and chief administration officer.
This is not the first retail chain Limited Brands has sold. The retailer has shed such nameplates as Lane Bryant, Abercrombie & Fitch and Tween Brands.
Wexner, who founded the Limited 24 years ago, said the company is on track to expand the average size of a Victoria’s Secret store by 50 percent over the next five years.
The company is in the early stages of developing sportswear, accessories and swimwear under the Victoria’s Secret label.
“In November, we thought about and began to talk about international expansions,” Wexner said in a recorded message. “Since then, we acquired La Senza, which is more than the dominant lingerie retailer in Canada because it gives us the troika, if you would, of the three dominant intimate-apparel brands in North America. First, Victoria’s Secret; secondly, Pink [another Victoria’s Secret brand]; and third is La Senza.”—Deborah Belgum
