Limited Slips Back Into Intimate Brands

The Limited Inc. (Columbus, Ohio) has announced it will recombine with its Intimate Brands subsidiary (Victoria's Secret, Bath and Body Works and White Barn Candle Co.) through an exchange of stock of both companies. The Limited will swap its stock to obtain all outstanding shares of Intimate Brands. It had already owned 84 percent of the subsidiary that it spun off in the mid-1990s.

The Limited needs to buy back at least 31 million shares to complete the merger. After that, remaining Intimate Brands shares will automatically be converted on a one-to-one basis. At the end of trading on Monday, February 4, the two companies'stock prices were nearly identical: The Limited closed at $17.75 and Intimate Brands at $17.50 on the New York Stock Exchange.

“We believe this recombination of the enterprise is in the best interests of both Limited, Inc. and Intimate Brands, Inc. shareholders and associates,” said Limited chairman and ceo Leslie Wexner. “This clearer, simpler structure will allow us to fully develop the potential of our best brands across merchandise categories and distribution channels. A recombination of the businesses will provide greater flexibility in allocating resources, functional expertise and talent.”

After building a retailing empire of disparate brands in the 1980s and early 90s, The Limited embarked on a simplification strategy, starting in 1995. It sold Penhaligon's, closed Cacique, closed five of six Henri Bendel stores, split off Abercrombie & Fitch, spun off Limited Too, sold its majority interest in Galyan's Trading Co. and sold Lane Bryant. But this reacquisition brings back a retail operation that showed good holiday sales results (especially at Victoria's Secret stores) during an overall rough time for retail.

The Limited still operates about 4500 stores in the U.S. under The Limited, Express, Lerner New York, Henri Bendel and Structure (soon to be renamed Express Men's) nameplates.