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Limited Brands Pulls Back on Expansion

COLUMBUS-A previously announced 25% reduction in planned projects grows to a 35% reduction for 2008.

By Marita Thomas | Updated on May 22, 2008

COLUMBUS-While reiterating Limited Brands Inc.’s commitment to increases in both Victoria’s Secret and Bath & Body Works stores, during a conference call, Martyn Redgrave, EVP and CEO, also made clear that expansion plans have been cut back even more than was previously announced. He blamed the “strong headwinds” caused by “the price of gas, the mortgage and credit crises and recent negative trends in consumer sentiment” for a “very challenging retail environment.”

The company’s net income actually spiked to $97.8 million in the first quarter, up from $52.9 million in first quarter 2007. This came primarily from a pre-tax gain related to the sale of a non-core joint venture and a write-down on the value of another JV.

The one-time boost, however, did not reflect sales performance. Comp-store sales companywide fell 8% in this year’s opening quarter, compared with a 3% comp increase, excluding apparel, in first quarter 2007. Net sales fell to $1.9 billion versus $2.3 billion in the same quarter a year ago.

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