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 Victoria’s Secret Bath & Body Works White Barn Candle Co. Executive Summary.
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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 • Victoria’s Secret • Bath & Body Works • White Barn Candle Co.
Executive Summary • Leslie Wexner, Founder & President • First store opened in 1963 • 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”
Economic Factors September 11, 2001 Corporate scandals Rise in unemployment rates Assessment of Remote Environment
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 • 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 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”
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
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 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