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Business analysis of a Limited Company
The Limited, Inc.
Three Limited Parkway
Columbus, Ohio 43230
Written by:Dan Di Pietro
Administrative Decision Making
July 12, 1999
Name: The Limited, Inc.
Headquarters: Three Limited Parkway
Columbus, Ohio 43230
Internet Address: www.limited.com
Top Officers: Leslie H. Wexner, Chairman and Chief Executive Officer
Kenneth B. Gilman, Vice Chairman and Chief Administrative Officer
V. Ann Hailey, Executive Vice President and Chief Financial Officer
Arnold F. Kanarick, Executive Vice President and Chief Human Resources
Total Number of Employees: 131,000
Number of Locations: over 5,600 in Domestic U.S.
S.I.C. Number: 5621
Current Stock Price: $47.50
The Limited, Inc. was founded by Leslie H. Wexner on August 10, 1963, beginning with one store located in Columbus, Ohio. During its first year in operation, this store achieved sales of $157,000. His strategy was to provide a "limited" assortment of quality, fashionable sportswear at medium prices. The "limited" concept worked well and by the late 1970s, Wexner began a twofold strategy of market development and product development. New stores were opened and acquired an appeal to women of different ages, sizes, and budget limits.
The Limited, Inc. is comprised of a unique family of brands. Since the grand opening in 1963, the Company has grown to over 5,633 stores and 13 retail businesses. Businesses that fall under the umbrella of The Limited, Inc. are: Express, Lerner New York, Lane Bryant, Henri Bendel, Structure, Limited Too, and Galyan's Trading Company. The Limited, Inc. also owns 83% of Intimate Brands, Inc., IBI, which consists of Bath & Body Works, and Victoria's Secret.
Instead of offering a wide-variety of types of clothing, the stores offer a limited assortment in large quantities and a variety of colors. The company emphasizes rapid turnover of inventory so only the newest fashion is in the stores at all times.
As of 1997, the Limited, Inc. is a $9.2 billion specialty retailer selling women's, men's, and children's apparel; lingerie; personal care products, and sporting goods through its 5,633 stores and a catalogue. The past few years have seen significant change in the business. In May 1998, The Limited, Inc. completely divested itself of Abercrombie & Fitch stock. They gave shareholders the choice of exchanging their Limited shares for shares of A&F in a process known as a modified Dutch tender.
Today, The Limited, Inc. operates as four separate business groups: Women's Brands, Emerging Brands, Intimate Brands, and Support Businesses.
The Express underwent reconstruction in the early 1990s to have a more sophisticated European image instead of the neon-lit high-tech store of the mid-1980s. The company now describes its Express stores as providing "hot new fashion to young women in their early twenties." Merchandise includes "young and spirited fashions of good taste and quality." A private label brand created for the Express is called Compagnie Internationale. Express added petite sizes in 1995. The 753 Express stores in operation as of year-end 1997 were located mostly in shopping malls.
This is the flagship division of the organization. Originally, merchandise in these stores was targeted to women between the ages of 16 and 25, but that orientation changed to women in their thirties and forties several years ago. Limited Stores recently shifted its orientation to women who want "casual American fashion." These stores focus on the sale of medium-priced fashion clothing and accessories. The company began opening larger-format Limited stores in 1990, and older stores took on a new look to provide additional selling space. Most of the 629 Limited stores are located in regional shopping centers or malls across the U.S.
In 1985, the The Limited, Inc. purchased this upscale fashion store. The store offers the best in clothing and accessories from international designers. The price of clothes correlates with "today's modern woman in her mid-thirties in a higher-income household." This is the only upscale store owned by The Limited, Inc.. There were six Henri Bendel stores as of year-end 1997.
This division sells fashionable women's sportswear for "value-minded customers." The store created a brand called NY & Co. There were 746 Lerner stores in operation as of year-end 1997 in malls and shopping centers across the U.S.
Lane Bryant had been in operation for 80 years and was actually larger than The Limited, Inc. at the time of purchase in 1982. Lane Bryant's market is middle-aged-women between 30 and 50. The store specializes in the sale of medium-priced clothing, intimate apparel, and accessories for the "special-sized woman" (sizes 14 and up). Nearly all Lane Bryant stores originally were located in regional shopping centers, but Wexner has shifted Lane Bryant stores to mall locations near the other Limited stores. There were 773 Lane Bryant stores as of year-end 1997.
The Limited, Inc., began testing the market for men's fashions by offering "Express for Men" in Express stores beginning in 1987. Sixty-nine Structure stores opened in 1989 and by the end of 1997, there were 54 stores. Structure stocks good-quality, affordable clothing in the latest styles. The target customer is in his mid-twenties and "urban, active, young, and creative." Structure stores generally open into Express stores so customers can shop in both stores without having to exit to the mall.
The market for girls' clothing (sizes 6-14) was tested by The Limited in the late 1980s when the Limited Too brand was offered in The Limited's flagship store. Sixty-two stores opened during 1989, and by the end of 1997, there were 312 Limited Too stores. Clothing sold in Limited Too stores is stylish - the newest in colors, prints, and fabrics-and moderately priced.
Galyan's Trading Company:
In 1995, The Limited, Inc., acquired six Galyan's stores for $18 million in cash and stock. The company had a total of 11 stores by year-end 1997. The company says Galyan's is "the coolest destination in retailing for sports enthusiasts and 'wannabes' of all ages." A new distribution center for Galyan's opened in 1997.
Victoria's Secret: stores, bath and fragrances
Victoria's Secret Stores are the most dominant, intimate apparel stores in the world, presently selling more lingerie than industry competitors Vanity Fair and Maidenform. The stores were redecorated in the early 1990s in a "Victorian Parlor" style. Victoria's Secret bath and fragrance products are an increasingly important portion of store sales. The division's newest product is hosiery. There were 789 Victoria's Secret stores in the U.S. as of year-end 1997.
Victoria's Secret Catalogue:
Since its purchase by The Limited, Inc. in 1982, the catalogue has steadily increased its operations. Now Victoria's Secret Catalogue is the dominant catalogue for lingerie in the world. The Limited, Inc. spent $10.7 million in 1994 to purchase a telemarketing center in Ohio on Victoria's Secret catalogue operations expansion. The division has three successful specialty catalogues: Swim, Country, and City. A new catalogue introduced in 1996 was "Christmas Dreams and Fantasies." In 1996, the division established a calling center in Japan. This allowed a market for mail order sales.
Bath and Body Works:
In response to demand by consumers for natural personal-care products, The Limited opened six B&B Works stores in 1990. These stores have a natural market atmosphere and sell a variety of personal care products. There were 921 B&B Woks stores as of year-end 1997.
Mast Industries, Inc. is one of the world's leading international contract manufacturers, importers and distributors of apparel for men, women and children. Product lines range from sportswear and ready-to-wear to lingerie. Mast delivers over 100 million garments a year to The Limited, Inc. retail and catalogue divisions.
Limited Distribution Services:
The purpose of Limited Distribution is to design and implement operations that will provide the retail business with the most effective and efficient delivery operations available. Limited Distribution Services will have achieved its objective if each of its customers believes that it has been an asset in helping them achieve their goals.
Limited Real Estate:
Responsible for locating and leasing all store sites for retail businesses of The Limited, Inc., Intimate Brands, Inc., and Abercrombie &Fitch, Limited Real Estate continually searches for new and exciting retail environments where our brands can be showcased.
Limited Store Planning:
Limited Store Planning's mission is to create the most innovative, successful stores in the retail business. It employs talented design, engineering, architecture, construction, purchasing, and finance associates -- highly focused teams designing and building leading-edge retail space.
Limited Design Services:
Limited Design Services oversees the design of branded apparel and merchandise for the retail businesses.
Limited Brand and Creative Services:
Limited Brand and Creative Services will work with the Chairman and the individual operating businesses to create brand with the founder's visions, and meet customer expectations.
Gryphon is one of the world's leading producers of cosmetics, fragrances and personal care products. This year, Gryphon will create, package and deliver almost 300 million units of over 1,000 different products. Responsible for supplying Victoria's's Secret Bath &Fragrance products, Bath &Body Works products, and new products for Abercrombie &Fitch, Gryphon has similar plans for the Limited Too lines.
After extensive research on the part of myself there was no missions statement found. Here is missions statement that would cover all of the areas possessed in a good missions statement.
-It is the Limited, Inc.'s full duty to provide a service to surrounding communities from every division of the company. The Limited, Inc. excepts responsibility for employees. We offer programs to better deal with lifes problems, geared towards creating friendlier work environments. We want to try to get a better handle on advertising from a promotional point of view. This will allow us to establish specific areas for each brand to compete. At the Limited, Inc. we take an already strong brand franchise and extend it in fresh new ways. We also formalize processes and take that expertise into other areas of the company. It is the goal for Limited, Inc. to give their customers what they want, when they want it.
ANALYSIS OF INTERNAL DOMAINS
Financial Position / Capacity
The Limited, Inc. continues to provide evidence of financial strength and flexibility. This company continues to be successful year to year. New sales for the '98' year were $9.347 billion as compared to $9.188 billion in '97' and net income rose to $2.053 in '98'. Net income declined 49.9% to $219 million. All of these sales come from the 26.316 billion square feet of selling space that The Limited, Inc. owns throughout all of its 5,382 stores. The company's long term debt-to-equity ratio declined to 25% at the end of 1998 from 32% in 1997, and working capital increased 14% over 1997 to $1.1 billion. This shows that The Limited, Inc. long-term debt is decreasing. The Limited, Inc. has total assets of over $415 billion. As a whole it is obvious to see that The Limited, Inc. is in strong financial position with the opportunity to take advantage of more costly strategies.
Leslie H. Wexner
Chairman and CEO
Kenneth B. Gilman
Vice Chairman and CAO
V. Ann Haily
Executive Vice Pres. and CFO
Arnold F. Kannarick
Executive Vice Pres. and Chief Human Resources Officer
BUSINESS UNIT LEADERS
Intimate Beauty Corp.:
Lerner New York:
Victoria's Secret Catalogue:
Victoria's Secret Stores:
Bath and Body Works:
Beth A. Preteberry
Micheal W. Rhodem
Galyan's Trading Co.:
Micheal A. Weiss
The Limited, Inc. operates 5,640 stores across the United States. Their stores are located primarily in shopping malls. In 1996 the company only had 5,300 stores open. They has 131,000 associates and a total of 28,400,000 selling square feet. The Limited is a growing company and the number of open stores and square selling feet justifies this.
The Limited, Inc. is a shopping mall mainstay all over the United States. The Limited focuses primarily on clothing for women in their twenties. The clothing lines offered in the Limited's stores are of average prices geared more towards the middle class consumers. These stores do not offer many different styles although they do offer many different colors and sizes. These clothes can be purchases at mall all over the United States. The Limited, Inc. advertises mostly in magazines, although some advertising money is placed towards television advertising. All of these factors can go into the Limited, Inc's marketing capacities.
Research and Development
In 1997, The Limited, Inc. is involved in many different areas of research and development. They put approximately 8% of all of their retained earnings back into this area. In 1997, the company acquired certain personnel to research what would be involved in building new images for both Limited and Structure stores, both suffering from lagging sales. The company is trying to focus on the success of branding campaigns. These personnel are researching the changes in changes consumer's shopping habits. The Limited wants to design a branding campaign that will reposition its businesses into consumer's minds as destination stores. This is an example of just one project. The Limited runs many projects similar to th
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