LIMITED BRANDS 2007 ANNUAL REPORT About the Cover: Adriana Lima in Biofit®, the Biggest Bra Launch in History
Total Page：16
File Type：pdf, Size：1020Kb
LIMITED BRANDS 2007 ANNUAL REPORT About the cover: Adriana Lima in BioFit®, the biggest bra launch in history. Leslie H. Wexner DEAR PARTNER, Let me start by sharing a conversation I had recently with our leadership team. They are a talented group. Proud. Experienced. Results oriented. And they were understandably dissatisfi ed with our performance in 2007. I thought long and hard about what I would say to them … and why. My job is to lead. To balance short-term results against the long-term. To get us ready, not just for the coming year, but for the next 10 to 20 years and beyond. To force thinking— to get us to the future, while making sure we are winning—NOW, each and every day. MAKE OUR CUSTOMERS FEEL SOPHISTICATED, FOREVER YOUNG AND SEXY To lead, you need a clear sense of where you were, where you are and where you’re going. You must have a vision for the business, and, As I sat down with our executive team, importantly, agreement about the objectives, I wanted to make a few things very clear. an organizational structure built to achieve them, and the alignment, focus and talent to • We expect top-tier performance. Period. make the vision become reality. • We aren’t going to just talk about fundamentals. We are going to execute Our vision is clear: to make our customers them. Flawlessly. feel sophisticated, forever young and sexy. • Where we have problems, they are self- We have created brands with the highest infl icted. No excuses, no victims … we take emotional content in specialty retailing. the responsibility and we fi x the problems. • Likewise, our opportunities are self-created. Our growth imperatives are also clear: to grow our core brands in current channels and geographies, extend them into larger footprints, new channels and geographies, and incubate and grow new brands in our current channels. To do all this we need to build the infrastructure and capabilities, proactively manage our capital structure and be a top destination for talent. That’s the vision, and the path to achieve it. It was important that everyone in the business understood. Starting with our leaders. I also wanted to give the leaders my take on the year past, and the year ahead. Looking at last year is useful as it gives us • We resized and realigned the enterprise insight into the future. And in that context, while signifi cantly shrinking our workforce many good things, consistent with our to match the needs of the reshaped long-term growth plans, were accomplished enterprise, making sure we are lean in 2007: and effi cient. • We sold a majority interest in Express • We began to work on our international and Limited Stores (our retail apparel growth in earnest, recognizing the global businesses). potential of our lingerie and personal care and beauty brands, signifi cant to our future. • We acquired La Senza, expanding our position as the dominant lingerie retailer in • We refi nanced the company, repurchasing North America and giving us experience $1.4 billion of shares while taking on an and insights into international markets. additional $1.25 billion in debt. • We successfully added Victoria’s Secret • And our associates at every level donated Beauty product to La Senza stores in their time and money to communities where Canada, further proving the market we live and work around the world. acceptance of Victoria’s Secret in Canada. • We opened a new distribution center for Victoria’s Secret Direct (one that will support us for the next 20 years). • We implemented and fully stabilized more sophisticated supply chain systems and processes at Bath and Body Works, critical at our current size, and imperative to the speed and agility we need for future domestic and international growth. CRYSTAL CLEAR FOCUS I told our leadership that we begin 2008 • Henri Bendel has shown real promise as in a good place. We are sorted out. The a sophisticated accessories-based brand, foundation is set. Our agenda and focus are a high-margin opportunity, and we are crystal clear, and we have a number of planning on opening three to fi ve additional weapons in our arsenal as we begin 2008: stores in 2008. • Victoria’s Secret and Bath and Body Works • Our direct business does almost $1.5 billion are among the top fi ve U.S. specialty in sales, proof positive that we have retailers in sales and productivity, and both signifi cant direct and internet ability (over have global recognition and sales potential. two million people visit the Victoria’s Secret Victoria’s Secret has over 60 million website daily). This expertise will serve our customers, and Bath and Body Works has brands well in the future, and we have the major opportunity in home fragrance and physical capacity to help them grow. candles, a market they lead, and one they can dominate. • We are in over 2,600 stores in the U.S., 300 stores in Canada, and almost 470 La Senza • Victoria’s Secret, Pink and La Senza are the stores in 40 countries. three largest lingerie brands in the world. • We continue to demonstrate the ability to create new brands like Pink—perhaps the fastest growing specialty retail brand in Pink is the #1 most visited history, and, amazingly, the #1 most visited brand on brand on “MySpace”! “MySpace” with over 200,000 “friends.” • Victoria’s Secret Beauty and Bath and Body Works total sales make us the fi fth largest beauty and personal care company in North America, and we are already doing signifi cant volume globally with enormous growth potential. Today, we are a new and very different enterprise. Our brands are the best in the world and are in growing segments that we dominate domestically and globally. We know that 2008 will be a challenging year The past is behind us. It can’t be changed. for retail. So our fi nancial planning will be But we can, and we must, impact the future. conservative: tight control of everything from I told them to think like shopkeepers; to focus inventories to expenses to capital investments. on the customer experience; to bring their But at the same time, we are aggressively brand’s emotional story to life. To distort pushing innovation in the things we sell and resources and inventory and mind-share to how we sell them. Pushing imagination and big ideas. To concentrate on opportunities creativity harder than ever. In a challenging and not get distracted by the small stuff. environment, strong, best brands win—and To not just spend time in stores, but to work win big —gaining market share in the process. even harder to know the customer, really know These should be very good times for us. her, like a friend, and give her what she wants: We can be fi nancially conservative and still newness, freshness, fun, sexy, never-seen-it- make strong brands even stronger: the before, got-to-have-it products—be it lingerie biggest, most popular brands of their kind or beauty—all with high emotional value. in the world. Which is exactly the charge I gave to our leadership. The Victoria’s Secret Super Bowl commercial became the single most- watched commercial in history with 103.7 million viewers. I told them to mix it up. Do things like we’ve never done them before. Not for the sake of doing, but because they’re worth doing. I asked them to free themselves up, to look at the world differently, to avoid distractions, and to focus, focus, focus on the fundamentals of this wonderful business. And I told them to pull together, working toward a common goal. The year 2007 was an important, transformational one. It was a year when we did what we needed to do to get to next. As we begin this year, we have a laser-like focus on performance—no ifs, ands or buts. We have the talent, the real estate, the capital, the opportunity and, most importantly, the brands to win. I wouldn’t trade places with anyone … and I look forward to the enormous opportunities of tomorrow. We’ve done the things necessary to prepare to win. Now we just have to do it. Sincerely, Leslie H. Wexner Chairman and Chief Executive Offi cer Limited Brands FINANCIAL RESULTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 2, 2008 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 1-8344 LIMITED BRANDS, INC. (Exact name of registrant as specified in its charter) Delaware 31-1029810 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) Three Limited Parkway, P.O. Box 16000, 43216 Columbus, Ohio (Zip Code) (Address of principal executive offices) Registrant’s telephone number, including area code (614) 415-7000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $.50 Par Value The New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.