Limited Brands Inc.LTD

Morningstar Rating

Stock Research and Analysis

by Zoe Tan

Limited Brands owns Victoria's Secret and Bath & Body Works, two of the most dominant specialty retailers in the United States, based on store count. Although increased competition from mass merchants and other specialty retailers in the lingerie Read more

Bulls Say

With more than 25% market share, Victoria's Secret dominates the premium segment of the intimate apparel market.

The divestitures of Express and Limited Stores have had a positive impact on profitability.

A greater emphasis on shared services, including information technology upgrades, should help leverage fixed costs over the entire company.

International expansion could be a huge growth driver for Victoria's Secret and Bath & Body Works. Read more

Bears Say

Victoria's Secret and Bath & Body Works have little room to expand in the U.S.

New intimate apparel retailers, such as Aerie from American Eagle and Gilly Hicks from Abercrombie & Fitch, may capture market share from Pink and Victoria's Secret.

The firm could jeopardize its brand names, given that most international stores will be franchised, making it difficult to control the quality and pricing of its products.

Increased promotions and the introduction of lower-priced products in Victoria's Secret stores could hurt its premium brand positioning over the long run. Read more

Strategy

Limited Brands sold its Express and Limited apparel segments in 2007 in order to focus on its more profitable Victoria's Secret and Bath & Body Works chains. Business portfolio reshuffling is nothing Read more

Management

Chairman and CEO Leslie Wexner founded Limited Brands in 1963, and has been at the helm ever since. We believe corporate governance would be improved if these roles were split. Executive compensation is generous, in our opinion. In 2008, Wexner earned Read more

Profile

Limited Brands' portfolio of stores includes Victoria's Secret, Bath & Body Works, White Barn Candle Co., C.O. Bigelow, La Senza, Pink, and Henri Bendel. The company Read more

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