Is Limited’s Future Limited?

Executives of Limited Brands Inc. (Columbus, Ohio) said in recent investor meetings that the company’s future is in Victoria’s Secret and Bath & Body Works, fueling speculation that it might sell its Express and Limited Stores apparel divisions.

According to a report on dnrnews.com, rumblings about a sale or spin-off of the apparel divisions have been circulating for the past year. The talk, said the menswear web site, was that management kept the divisions hoping to effect a turnaround and possibly fetch a higher price should they later decide to sell.

Limited is roughly a $500 million business, while Express does about $1.6 billion in sales. The web site quoted a research note saying that due to current depressed results, it might be the right time for management at Limited Brands to “reconsider” its plans. The point was that as apparel results have remained lackluster, perhaps selling the division – albeit at a lower price – will at least provide the company with cash. Even if there’s an eventual turnaround for the apparel divisions, there’s not much growth beyond normalized earnings, the analyst, Richard Jaffe of Stifel Nicolaus, wrote. He said the divisions might be sold for between $400 million and $600 million.