Easton, Ohio — Once again, Leslie H. Wexner has seized upon a small brand and is preparing to blow it out.
He did it with Victoria’s Secret and Abercrombie & Fitch. Now his vision is to modernize the mom-and-pop apothecary by reinventing C.O. Bigelow, the 166-year-old Greenwich Village institution filled with everything from homeopathic remedies to niche beauty products, and a lot of lore.
The Limited’s first C.O. Bigelow apothecary opened Tuesday in the Easton Town Center here, to preferred customers and Wall Street retail analysts. It officially opens Thursday.
The heavily merchandised, 8,000-square-foot Bigelow is being run by Limited’s Bath & Body Works division. But compared to the BBW chain, there’s a broader spectrum of products and prices, an upscale, clinical image that conveys knowledge and know-how, and a greater number of brands, both private and third party. The latter provides the retailer a platform to both intensify product development and promote labels that aren’t it’s own. The 40-year old Limited Brands began pursuing outside brands wholeheartedly a year and a half ago, after four decades of primarily being private label.
The Bigelow venture also reflects Limited’s transformation into what Wexner characterizes as “an upscale branded consumer packaged goods company.”
“Why do we compare ourselves to a packaged goods company? From idea generation to revenue generation, packaged goods companies offer a better model for building a successful, predictable, growing business than our retail competitors,” the Limited Brands chairman and chief executive officer wrote in a letter this week to shareholders, which will form the basis for Wexner’s annual update for investors and analysts today in Columbus. “In the packaged goods industry, innovation, speed to market and efficiency drive consistent, profitable growth.”
Wexner also wrote that 10 years ago, 30 percent of the company’s revenues were in personal care-beauty and lingerie. Currently, 70 percent of sales are in these categories. The Limited had net sales of $8.9 billion last year off a 4 percent comp-store gain, and net income increased to $716.8 million, compared with $501.7 million in 2002.
“We have achieved this through an intense focus on our core Victoria’s Secret and Bath & Body Works businesses and on prestige brands that drive growth,” Wexner wrote. “We have also divested businesses not consistent with this strategy,” including Brylane, Penhaligon’s, Abercrombie, Limited Too, Lane Bryant and Galyan’s Trading Company.
Wexner also said: “Opportunities for growth across our brands are significant” even with Henri Bendel, which is also being reinvented “as another entrant for us in the personal care-beauty and lingerie business and as another exciting concept with which we are experimenting.” The Henri Bendel flagship on Fifth Avenue is being “reconfigured to sell an array of leading color cosmetics brands and a significant number of luxury European lingerie brands,” Wexner said. Limited also operates Express and Limited Stores.
At the Easton center, which Wexner was instrumental in developing and which often serves as a laboratory for testing the latest Limited formats, Bendel’s has taken over a former Aura Science space to launch its first branch in years. It will emphasize beauty and personal care, whereas the Fifth Avenue Bendel’s will have a wider array. Not surprisingly, Limited is being coy about the Bendel’s branch, expected to open this week. Because of its small size, at just 1,800 square feet, it may not truly reflect the Bendel’s assortment of the future.
In the Nineties, Limited rolled out a handful of Bendel’s branches but they flopped due to a lack of major designer labels and tough competition from Saks Fifth Avenue, Neiman Marcus and other luxury stores.
Limited also dropped Aura Science as a retail concept this year. The nine test stores were all closed as of Jan. 13, though Aura Science products are sold at VS Beauty stores and later this year will be sold at some BBW locations. “So in the beauty category we have two established businesses — Victoria’s Secret Beauty and Bath & Body Works — and now we’re adding Bigelow and Bendel,” Wexner said.
“The rate and pace of innovation has picked up exponentially in the last year and a half, which is quite exciting,” said Leonard A. Schlesinger, vice chairman and chief operating officer of Limited Brands, during an exclusive tour of C.O. Bigelow in Easton on Monday.
He noted the store launches some categories, lines and products never sold before by Limited, such as beauty accessories, including tweezers, mirrors, scissors and brushes, and internally developed brands such as Tutti Dolci body care formulated with natural ingredients like macadamia oil, almond butter and honey, and scented with French flavors like crème brûlée and lemon meringue. Tutti Dolci will also be sold at BBW and, overall, about 20 percent of the Bigelow merchandise can also be found at BBW, but there is only about a 10 percent crossover with Bendel’s, Schlesinger said.
Owned brands sold at Bigelow include the Perfect Christmas collection of home fragrance, ornaments and candles, and the Henri Bendel collection of home fragrances and candles. Among the third-party brands are Frédéric Fekkai, L’Artisan Parfumeur, Molton Brown, Murad, Nars and Acqua Di Parma.
“The consumer really does want abundance,” said Schlesinger, describing the Bigelow presentation. “There’s 50 percent more merchandise on the floor than Bath & Body Works and 2 1/2 times the number of sku’s. It’s a very heavily merchandised store.” As far as the price range, “It’s everything above mass and up to and including high-end specialty retail.”
With its green awnings and old-fashioned flasks, bottles, microscopes, and even a few black leather doctors’ bags, the store evokes the landmarked C.O. Bigelow store, located on Sixth Avenue and Ninth Street. “It celebrates the heritage of Bigelow, a well-known New York destination that generations of New Yorkers have appreciated,” Schlesinger said.
However, the interior, designed by the Toronto firm Yabu Pushelberg, is really about modernity, with its clean, Corian fixtures with nickel trim, and no-nonsense, flexible and highly organized layout. When there’s remerchandising to be done, “There is no need for dramatic redesign,” Schlesinger said. “We showcase brands and products by just changing the nameplates along the perimeter of the store, which is flexible space.”
Essentially, there are two main aisles, with heavily merchandised perimeter walls. Down the middle are broad display columns with demo sinks dividing the store into four areas. The first is for pampering and aromatherapy products like body lotions and scrubs; then body and skin care and color cosmetics, followed by spa products, men’s grooming, and hair care, and finally gift sets, home fragrance, perfumes, the cash wrap, and the spa. The effect is a pharmaceutical feeling, rather than one that is brand-driven, with all the brands being uniformly fixtured and given the same signage. “It’s more about the overall environment than any one brand,” Schlesinger said.
“This is a one-store test,” Schlesinger stressed, but he believes only one test store is required to determine if the experiment works. “Easton is one of America’s best test markets,” Schlesinger asserted, noting the area’s broad demographics and the center’s proximity to Limited’s headquarters in Columbus make Easton suitable testing grounds. Moreover, the store can easily and quickly be tweaked and closely supervised since it’s close to the home base.
Asked how long the test will last before a decision is made on rolling out or nixing the Bigelow concept, Schlesinger replied, “I don’t know. You test it till it’s baked.”
He wouldn’t comment on how many Bigelow stores are being considered, but he did say, “We wouldn’t invest this level of energy if we didn’t have aspirations for it. But right now, it’s just a one-store test.” He added that the apothecary format has “always been a mom-and-pop, single-unit business, or with a couple of units. We have no awareness of a national apothecary.”
He added that he expects the store to do “significant volume and profitability,” but refused to specify. Market sources said the unit is expected to generate in excess of $5 million in sales in its first year in business.
Last December, Limited announced its partnership with Bigelow and obtained the rights to the name. The company also works with Bigelow’s owner, Ian Ginsberg, to develop products and scout new brands. Ginsberg retains ownership of the Sixth Avenue store. Bigelow also operates a catalogue and sells online, operations that remain controlled by Ginsberg.
The strategy with Bigelow parallels what happened with Victoria’s Secret, purchased by Limited in 1985. “VS back then was three essentially bankrupt stores with $600,000 in volume and over $1 million in losses,” Schlesinger recalled. Now, of course, it’s considered a giant cash cow that dominates the market.
There’s a richer heritage behind Bigelow. According to Limited, Mark Twain filled his prescriptions there, and Thomas Edison once burned a finger on a lightbulb and rushed to the store for some soothing cream.