The Limited, Inc.

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The Limited, Inc.

Two Limited Parkway
Columbus, Ohio 43216
U.S.A.
(614) 479-7000
Fax: (614) 479-7080

Public Company
Incorporated: 1963
Employees: 72,500
Sales: $5.25 billion
Stock Exchanges: New York London Tokyo

The Limited, Inc. is one of the largest specialty apparel retailers in the United States. It has more than 3,800 stores, including the Limited and Express stores, selling young women’s clothing; Henri Bendel, upscale women’s fashion stores; Lane Bryant, focusing on larger sizes; and Victoria’s Secret, a group of lingerie shops. The company is largely the vision of its founder and chairman, Leslie Wexner.

In 1961 Leslie Wexner dropped out of law school and went to work in his father’s women’s wear store in Columbus, Ohio. Wexner suggested business would improve if the store concentrated on sportswear, but his father, Harry Wexner, said a full product line was necessary to attract customers. He encouraged his son to try out this idea, which Leslie Wexner eventually did.

In 1963, with a $5,000 loan from his aunt, Wexner opened a 2,000-square-foot store in Columbus’s Kingsdale shopping center. Wexner christened it The Limited for the limited merchandise it carried. Wexner’s goal was to gross $100,000 the first year. He surpassed this with sales of $162,000, and opened a second store.

By 1965 The Limited was so successful that Wexner’s parents, Harry and Bella, closed their own store and joined him at The Limited. Harry Wexner served as chairman until his death in 1975. As of 1991 Bella was still on the board as corporate secretary, providing her son with advice on his business moves.

One year after his parents closed up shop and joined him, The Limited opened its first corporate headquarters above its Eastland mall store in Columbus. That year its number of employees reached 100. By 1968 The Limited’s sales had surpassed the $1 million mark.

In 1969, with five stores operating, Wexner issued The Limited’s first public stock, traded over the counter. After going public, the company began to expand rapidly—too rapidly, causing earnings to collapse. Wexner responded by improving the efficiency of the company’s manufacturing and distribution systems. In a brief period, what The Limited had done in order to survive became the company’s distinctive strength.

After identifying The Limited’s trouble spots, Wexner implemented a system of financial controls supported by electronic point-of-purchase terminals. These terminals allowed the company’s Columbus headquarters to monitor inventory levels to see what is selling and where it is selling, which helps The Limited to aggressively mark down slow-selling items, clearing shelf space for hot new items to be brought in. Although marking down slow sellers is not a fresh idea, the speed at which headquarters can evaluate and authorize these markdowns is. The computer lines that link The Limited’s shops to corporate headquarters bring the company the flexibility and speed of a small privately run boutique, giving The Limited a competitive edge over department stores that are forced to stick to price adjustment budgets planned months in advance.

The Limited’s 1970 annual report, produced with a common copy machine, was so bold as to predict The Limited would become the largest and most profitable retailer of woman’s specialty clothing in the nation, although, at the time, there were only six Limited stores in existence. The company’s confidence certainly paid off. By 1974 The Limited had more than 1,000 employees, and by 1976 The Limited had opened its 100th store. It had carved out a niche selling to young, fashion-conscious women who could coordinate an entire wardrobe with one stop at The Limited.

The Limited’s purchase of Mast Industries in 1978 added to the company’s efficiency and flexibility. Mast Industries, a supplier that contracted with more than 150 production facilities around the world, became The Limited’s merchandise procurement arm. This acquisition, coupled with the electronic point-of-purchase terminals on line to headquarters, allowed The Limited to place orders and purchase and restock shelves with its most popular merchandise within two to three weeks, compared to the months required by competing department stores. The Limited had also opened its first distribution center, 525,000 square feet on Morse Road in Columbus.

The Limited did more than concentrate on a specific market segment; it segmented the segment. In 1980 it opened its first Limited Express store, which focuses on the youngest of fashion-conscious women, teenagers, putting more trendiness into its designs than would go into women’s sportswear. In 1982 The Limited Express, with eight successful stores, became a separate business and was later renamed simply Express. The Limited’s expansion and market segmentation did not stop there.

In 1982 alone The Limited acquired Lane Bryant, Victoria’s Secret, and Roaman’s, merging the latter with Sizes Unlimited. That year The Limited was also listed on the New York Stock Exchange, and its number of employees reached 10,000.

Each acquisition focused on a specific segment of the market. During the restructuring of Lane Bryant, which sells clothing for larger women, The Limited dropped its very largest sizes and restocked shelves with lower-priced, more fashionable sportswear aimed at younger women. It signed a contract with Bonjour to produce jeans and other stylish sportswear in large sizes, giving the chain a new image. When The Limited purchased Victoria’s Secret, stores and catalog, it legitimized women’s purchase of sexy lingerie on a national scale. Victoria’s Secret stores, full of floral and lace pillows, old English furniture, and classical music, projected a respectable image.

The Limited’s procurement arm, Mast Industries, helped supply all of the Limited’s subsidiaries. In 1984, when Limited buyers stocked stores with career clothes that no one would buy, the Limited was able to develop, place orders for, and receive the completely new, private Forenza line, all within a matter of months, managing to reverse a slump that could have been catastrophic.

These private-label goods, which The Limited manufactures specifically for its stores, are produced at low cost in Third World country and sold for whatever price the market will support. The private labels can support large markups because The Limited creates a desirable image for each line. The Forenza line sported a romantic Italian name, although most of it was produced in the Far East; garment tags bore the name of a fictitious designer, Maria Pia, a production consultant whose name had appealed to Wexner.

By 1984 The Limited’s sales had surpassed the $1 billion mark. That same year it was listed on the London Stock Exchange. The Limited’s growth showed little sign of slowing. In 1984 The Limited offered to buy the financially troubled Los Angeles-based retailer Carter Hawley Hale Stores for $1.1 billion. The offer was rejected. In 1985 The Limited acquired Lerner Stores, a chain of moderate-price shops that it made profitable within the year, as well as Henri Bendel, which caters to upscale, fashion-conscious women. That year it also opened its second distribution center, a 1.07 million-square-foot facility, and The Limited’s number of employees climbed past 25,000.

Net sales rose past $3 billion in 1986. The first Lerner Woman store, carrying large sizes, was opened, and Limited Credit Services was formed. In 1986 The Limited, in partnership with Edward J. DeBartolo Corporation, again attempted to buy Carter Hawley Hale, offering as much as $60 per share. Carter Hawley Hale rejected the bid, selling more than 3.5 billion shares to White Knight General Cinema Corporation.

In 1987 the company opened two Limited International Fashion “superstores.” It introduced Limited Too, targeting children. It merged Sizes Unlimited and Lerner Woman. Express unveiled its men’s collection, and the number of employees reached 50,000.

The Limited in 1988 acquired Abercrombie & Fitch. The company debuted its own private-label intimate apparel business, Lingerie Cacique. It also opened The Limited Building, a one millions-square-foot distribution center and office. During the fashion slump that year it enlarged its specialty stores, giving them more expansive window displays, attempting to attract women with their look and size. In 1988 sales topped $4 billion.

The Limited sold Lerner Woman in 1989 to United Retail Group, Inc. It also obtained a charter for Limited Credit Services to become the World Financial Network National Bank, making it the first U.S. retailer to transform its credit division in that fashion. The company was ranked first in growth and profitability among specialty apparel by Forbes in January 1989.

Some industry experts question how long The Limited can grow at its current pace. They wonder if by leaving its original niche of small stores with limited merchandise for the fashionable yet cost-conscious woman, and by moving to larger stores or groups of stores that carry everything from underwear to clothes for children and men, The Limited might be losing its market advantage. Also, many U.S. manufacturers refuse to produce The Limited’s private labels or operate at the company’s breakneck pace. Still, the company forecast continued growth, with the expectation of adding $1 billion in sales per year during the early 1990s, toward a goal of $10 billion by mid-decade.

Principal Subsidiaries

The Limited; The Limited Express; Victoria’s Secret; Victoria’s Secret Catalogue; Henri Bendel; Lerner; Abercrombie & Fitch; Brylane; Mast Industries, Inc.; Limited Credit Services.