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Wexner Outlines Global Potential for the Limited

NEW YORK -- In its first overseas retail venture, The Limited will open four Bath & Body Works stores outside London this fall with Next PLC, a British partner that might also launch other Limited divisions in Europe.<BR><BR>Victoria's Secret,...

NEW YORK — In its first overseas retail venture, The Limited will open four Bath & Body Works stores outside London this fall with Next PLC, a British partner that might also launch other Limited divisions in Europe.

Victoria’s Secret, followed by Structure, Abercrombie & Fitch and Express shops could go on the agenda, Leslie H. Wexner, chairman and chief executive officer of The Limited, revealed Wednesday.

“These are very preliminary discussions,” said Wexner. “There is a proven market for cosmetics and personal care products. You can’t say the same thing about lingerie.”

Reports that The Limited and Next would collaborate on a Bath & Body Works venture appeared in these columns on June 14.

At Limited’s annual meeting in May, Wexner said it’s tough to sell fashion across borders: “Fashion retailing business has rarely moved successfully.”At Limited’s annual meeting in May, Wexner said it’s tough to sell fashion across borders: “Fashion retailing business has rarely moved successfully.”

The only sustained successes, he said, have been at very high fashion levels — areas not within Limited’s sphere of activity — and with packaged goods such as beer and personal care products. But with Next — described by Wexner as an “equal partner” splitting the costs and sharing the profits in the Bath & Body Works venture — he seems more open to selling his apparel brands abroad. “Apparel is most difficult, but not impossible,” Wexner said Wednesday.

“This isn’t just about Bath & Body Works,” observed Jennifer Black Groves, a retail analyst with Black & Co., Portland, Ore. “It could be much, much larger. Next is financially strong, and they have the channels of distribution to bring any of the 11 brands of The Limited into their market.”

Next is a 300-unit chain and mail order company based in Enderby, England. It sells men’s, women’s and children’s apparel.

Under the agreement, Next will find the sites and build and operate four Bath & Body Works freestanding stores near London this fall and possibly add two more by the end of the year, Wexner said. The Limited will provide the inventory of soaps, body lotions, face creams, bath oils and hair care items. “Clearly, within a year we will know the potential for Bath & Body Works in the U.K.,” Wexner said.

He said he sees the potential for 2,000 Bath & Body Works units around the world, including 100 to 200 in the U.K., provided the initial openings are successful.

Bath & Body is moving onto the home turf of The Body Shop, a major competitor founded in Brighton, England, in 1976. Bath & Body also competes with Crabtree & Evelyn, H20 Plus and Caswell Massey.

“People are crying out for personal care products throughout the entire world,” Groves said. “I believe the market is big enough.”

Wexner said other partners could be brought in to expand Bath & Body Works to other countries, although he didn’t exclude the possibility of Next opening stores outside the U.K. The plan with Next is to operate 1,500-square-foot freestanding Bath & Body stores in the U.K., although some smaller units could be carved out of existing Next stores, which are generally around 3,000 square feet. Bath & Body stores are around 2,000 square feet in the U.S.

Next, which is expanding in the U.S., has opened three stores here since September: in Boston and Peabody, Mass., and McLean, Va. A fourth store is slated for Natick, Mass., in October. The Limited has enjoyed explosive growth in its four-year-old Bath & Body Works division, which is expected to finish the year with $260 million in sales and 315 stores, compared to 200 stores doing $120 million last year.