Courtney Bell

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PRESENTED BY

• Courtney Bell
• Anvi Desai
• Lauren Johnson
• Bijal Patel
• Ravi Patel
• Nikita Tejpal

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Who are we?

• Limited Brands, Inc. sells women's intimate
  apparel, personal care products and women's and
  men's apparel under various trade names through
  its specialty retail stores and direct response
  (catalog and e-commerce) businesses.
• Merchandise is targeted to appeal to customers in
  various market segments that have distinctive
  consumer characteristics. The Company conducts
  its business in three primary segments
  Victoria's Secret, Bath Body Works and the
  Apparel segment.
• In addition, Limited owns Henri Bendel, Inc.,
  which operates a single specialty store in New
  York City that features fashions for
  sophisticated, higher-income women.

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MISSION STATEMENT
Limited Brands is committed to building a family
of the worlds best fashion brands to create
sustained growth of shareholder value by focusing
its time, talent, and capitol.
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What we stand for...
? Doing What is Right For associates, customers
and investors ? Being Inclusive In our thoughts
and behaviors ? Working For the Greater Good Of
the enterprise and the communities in which we
operate ? Pursuing Excellence In all we do
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Dance through the Decades
1960s The Limited opens its first store in the
Kingsdale Mall in Columbus, Ohio. 1980s Divisions
of The Limited Brands established The Limited,
Inc. listed on the NYSE Several new stores are
acquired including Lane Bryant, Victorias
Secret, Henri Bendel, Lerner stores, Express Men
and Abercrombie Fitch to name a
few. 1990s Full incorporation of Bath and Body
Works Victorias Secret launches e-commerce site
which has been profitable since day
one. 2000s White Barn Candle Company is
launched The Limited Inc. and Intimate Brands
recombine into The Limited Inc. The Limited Inc.
changes its name into Limited Brands Inc.
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Leslie H. Wexner Chairman of the Board of
Directors/Chief Executive Officer
Leonard A. Schlesinger Vice Chairman and Chief
Operating Officer
BOARD OF DIRECTORS
V. Ann Hailey Executive Vice President and Chief
Financial Officer
Mark A. Giresi Senior Vice President, Chief
Stores Officer
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A few of
our products
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Victoria's Secret

• Victorias Secret Stores are a leading specialty
  retailer that aims to succeed in womens intimate
  apparel and high quality beauty products.
• In 2004, this brand of Limited Brands Inc had net
  sales of 3.113 billion and operated 1,001 stores
  nationwide.
• Victorias Secret is the ONLY brand of Limited
  Brands that directly sends out a catalogue and
  mailed approximately 403 million catalogues in
  2004.
• The Victorias Secret brand is the largest for
  the corporation and continues to have an
  advantage over its competitors because of their
  ability to introduce new products and scents that
  are instantaneously successful.
• FUN FACT!!! This brands total nationwide sales
  are almost as large as the entire countrys
  lingerie market about ten years ago!

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Bath and Body Works

• Bath and Body Works initially established its
  first store in Boston, MA in 1990. This store is
  a leading specialty retailer of personal care and
  home fragrance products and also operates White
  Barn Candle Company.
• Bath and Body Works has now grown to 1,569 stores
  nationwide and both it and White Barn Candle
  Company produce net sales of 2.169 billion.
• The White Barn Candle Company provides
  distinctive, classy ideas and answers to
  customers on how to add fragrance and a sense of
  peace to their home. There are a total of 100
  White Barn Candle Company stores located
  nationwide.
• These stores have a large collection of home
  fragrances and interior decoration items that
  allow customers to develop a sense of
  exquisiteness and comfort for themselves and
  others.

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Express and The Limited

• Express and The Limited are the two fashion
  apparel retail brands that Limited Brands Inc
  manages and controls.
• Express is a modern trend leader for men and
  womens apparel, sportswear, and accessories.
  They try to offer unique styles for any type of
  individual. This could range anywhere from
  casual attire to professional attire.
• In 2004 Express had net sales of 1.913 billion
  and operated approximately 885 stores in the
  country.
• The Limited, similar to Express, targets modern
  American women and focuses on sophisticated
  sportswear. Since The Limited opened its first
  store in Kingsdale Mall in Columbus, Ohio, they
  have grown to 323 stores nationwide and have net
  sales of 577 million.

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Henri Bendel
A final brand of Limited Brands Inc is called
Henri Bendel. This brand operates specialty
stores in New York City and Columbus, Ohio and
targets sophisticated, higher-income women. They
feature products such as clothing and personal
care products that are different from their
competitors and one could not find anywhere.
Because there are only two locations of Henri
Bendel in the nation, the business had net sales
of 45 million in 2004.
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Company Pie Charts
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Whos in OUR Industry?

• EST. 1969
• One of the worlds largest specialty stores
• Net Sales 16.3 Billion
• of stores 3,000

• Founded in early 1892 by David Abercrombie
• Abercrombie is one of the most trendiest new age
  retail stores in America

• First Est. in 1977 in Worcester and Auburn,
  Massachusetts
• One of the largest off-price apparel retailer
• Operating 771 stores within the U.S.

• one of the nations leading fashion retailers
• They remain committed to the simple idea the
  company was founded on, earning the trust of
  their customers, one at a time.

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Market Capitalization

• As you can see, Limited Brands, Inc. is rated
  4th in our industry-this comes out to about 10
  of the industry
• One of our major competitors is Nordstrom who has
  the same Market Cap as we do.

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How do our sales compare?

• Limited Brands, Inc. in sales in ranked 3 with
  sales being 13.79 of the market.
• Our major competitor here is TJ Maxx and Gap
  whose sales jump dramatically by almost 50 of
  ours.

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Financial Ratios Growth Rates
The growth rates rated overall weak based upon
their Sales, EPS (YTD v. YTD), and EPS (Qtr v.
year ago Qtr.) all compared to the Industry and S
P 500.
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Price Ratios
When comparing Current P/E Ratios, Price/Sales
Ratio, and Price/Book Value to the industry and S
P 500, their overall rating was WEAK.
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Profit Margin
After comparing the Gross Margin, Pre-tax margin
and Net Profit Margin with the industry and the S
P 500, we concluded that their overall
performance in this category is GOOD.
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Financial Condition
Limited Brands, Inc. overall performance in the
category of financial condition is FAIR/GOOD!!!
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Investment Returns
After comparing the industry and the S P 500
with Limited Brands, Inc. investment returns ,
their overall performance was EXCELLENT!!!
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Management Efficiency
In the Management Efficiency category, Limited
Brands, Inc. was rated EXCELLENT
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Overall Ratings
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Holding Period Return
The holding period return is the rate of return
over a certain period of time. In the case of
Limited Brands, Inc, it is one fiscal year. Here
we calculated the HPR for the past three years
and then predicted what the HPR would be for 2005
using price, dividend, and the growth rate.
Limited Brands HPR has decreased steadily from
2003 to 2004 and it is expected to decrease
dramatically in 2005. Each year Limited Brands
has increased our dividend payout. It is expected
that our dividends in 2005 will be .56. The Mean
Target price is 22.07 Current Share price is
21.95.
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Free Cash Flow Cost of Equity
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Cost of Equity
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Risk Analysis
The company is currently underpriced because Ke
(DCF model) gt Ke (CAPM) 0.3606gt.0024
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Cost of Capital
The capital structure of a company is the sum of
the value of the firms debt and its equity.
Limited Brands, Inc. does not have any preferred
stock. This data outlays the objective to
maximize the value of the firm and minimize the
firms weighted cost of capital.
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Market Efficiency
Non-company Specific News June 15, 2005 0542 PM
ET Wall Street falls as crude rises above 56 As
Crude Oil rose above 56 a barrel, stocks also
fell greater than expected including the Limited
Brands Company. As you can see, the stock price
has increased and decreased over the days. Thus,
this means that there is NO FORM.
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Company News June 02, 2005 51800 PM ET
Schaeffer's SP 500 Index Hot Stocks Features
Albertson's, Limited Brands, Allergan, Citrix
Systems, and Prudential Financial
As you can see, this graph implies that it is a
NO FORM because the stock price has risen and
fallen over that week.
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Capital Structure
There have not been many significant changes in
the capital structure between 2002 and 2005. The
debt of the company is still high currently in
2005 because the company has to fund the
repurchasing of its stocks at the end of 2004.
Also the company is going to replace its existing
revolving credit facility with a new 1 billion
facility. Limited Brands, Inc. had a substantial
amount of equity in the previous years. The
equity was at its peak in 2002 at 67 percent.
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M M Proposition
Based upon the 3 points plotted in the MM
Model, the following weighted average cost of
capital seem to follow Model II. At year 1 and 2,
the WACC decreses. This shows that the debt that
Limited Brands, Inc incurred was probably much
higher than the past.
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The Good
Strengths Owner The owner is the CEO of The
Limited Brands, Inc. and he has been with the
company since it originated. One of his major
business decisions was to bring in people of a
new age group of people to revamp the companys
image. In addition, the company exercises only a
5 insider ownership. Victorias Secret Limited
Brands, Inc. sister store Victorias Secret, is a
leading specialty retailer that aims to succeed
in womens intimate apparel and high quality
beauty products. Also, it is the largest
corporation under Limited Brands. Pre-tax
margin The companys pre-tax margin is
averaging higher than industry averages. Thus,
the company has high net earning before
taxes. Ratios Limited Brands, Inc. overall
ratios are average compared to the Industry and S
P 500.
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The Bad
Weaknesses Sales for the company have performed
lower than average. The industry and SP 500
averages rank far greater than Limited Brands.
These averages point out that the company is
doing lower than expectations and may need to try
a new line of approach to push its sales up.
However, Limited Brands operates in anticipation
toward spring, fall, and holiday seasons which on
average account for one-third of its net
sales. Earning per share are very low compared
to the industry and SP 500. However, as stated
above, net earnings increase during the companys
fourth quarter including the holidays. Limited
Brands P/E ratio is lower than both the industry
and SP 500. In general, a low P/E means high
risk and high P/E means high projected earnings
in the future. However, this ratio is usually
only useful in comparing the P/E ratios of
companies in the same industry, or to the market
in general, or against the company's own
historical P/E. Limited Brands Inc. Beta is
lower than past years. This is seen as a weakness
because as the beta decreases their market
premium decreases and it also means that the
required return is going to decrease as well.
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5-Year Price Index
This shows a 5 year price idex for Limited
Brands, Inc.
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Buy, Sell, or Hold?

• For an investor, experts would say to buy when
  stock price is low usually in the companys third
  quarter. More importantly, Limited Brands is
  major competitor in the industry and will only
  grow, so it would be a good investment decision
  to buy in Limited Brands stock. For current
  shareholders, it would be a good idea to hold if
  they would like their investments to grow
  gradually.
• Financial Experts have varied as to what they
  would do between holding and buying. They lean
  more towards buying at this current time.

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THATS ALL FOLKS !!!!