L Brands (formerly Limited Brands) is as much of a shopping-mall mainstay as food courts and teenagers. The company operates nearly 3,000 specialty stores throughout North America primarily under the Victoria's Secret, Bath & Body Works (BBW), and La Senza (in Canada) banners, as well as corresponding websites and catalogs. Originally focused on apparel, L Brands sold its ailing Limited Stores and Express chains -- leaving the company free to focus on two core businesses: Victoria's Secret and BBW. L Brands also owns apparel importer MAST Industries, accessories boutique operator Henri Bendel, apothecary C.O. Bigelow, and The White Barn Candle Co. Founded in 1963, the company changed its name to L Brands in 2013.
Change in Company Name
The company belatedly changed its name from Limited Brands to L Brands to distance itself from the Limited Stores, which it jettisoned in 2007.
In conjunction with the name change, the company also realigned its reportable segments into Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath and Body Works International. About 60% of sales come from domestic Victoria's Secret stores driven by its eponymous and PINK brands. Nearly a third of sales come from the Bath and Body Works segment, which also includes White Barn Candle and C.O. Bigelow brands.
MAST Industries (dba Mast Global Fashions) is the company's production, sourcing and logistics arm - it accounts for the rest of sales. Mast is one of the world's largest contract manufacturers, importers, and distributors of apparel. Mast has manufacturing operations and joint ventures in more than a dozen countries including China, Israel, Mexico, and Sri Lanka.
Outside the US, L Brands has about 745 retail stores in Canada and the UK. International sales totaled $1.12 billion in fiscal 2014 (ended January), about 10% of L Brands' total. L Brands has a partnership with M.H. Alshaya (a popular franchise partner for many American retailers, including American Eagle Outfitters and Pottery Barn) to operate stores in the Middle East.
L Brands saw its total net sales increase 3% to $10.8 billion in fiscal 2014 (ended January) versus the prior year as Victoria's Secret and Bath and Body Works products sold well across all categories. After a dip the previous year, net income grew 20% due to the higher revenue along with lower costs and an absence of goodwill impairment. Cash from operations fell, however, from $1.4 billion to $1.2 billion, as cash used for inventory was higher.
L Brands entered the UK market in 2012 with the opening of a pair of Victoria's Secret stores in London; two more opened the following year. The company is hanging most of its hopes on international expansion of both Victoria's Secret and BBW stores. Target markets include the Middle East, Eastern Europe, and Latin America.
The company's goal was for Victoria's Secret to blossom into a $10-billion brand, but the global financial crisis, decline in consumer confidence, and poor performance of the La Senza business in Canada conspired to delay the growth strategy for the bra-and-panty business. The strategy at Victoria's Secret is to capture the teen and college-age female customer with its youth-oriented PINK brand, with the hope that as she matures she will shop for sexier styles, such as Angels and Very Sexy, sold in Victoria's Secret stores. PINK is sold in freestanding stores as well as Victoria's Secret shops. While the retailer doesn't break out PINK sales, the brand is meeting stiff competition from American Eagle's Aerie brand and Gilly Hicks by Abercrombie & Fitch. Both target the youth market. L Brands has been closing La Senza stores and repositioning the brand. It has moved La Senza's headquarters from Canada to Ohio and stopped reporting the chain's financial results along with its Victoria's Secret business, which it did prior to fiscal 2012. In addition to La Senza's 150-plus shops (down from more than 300) in Canada, an additional 330 La Senza stores are operated in some 30 countries through franchisees.