Limited Brands Inc. may be late to the international party, but it’s now making moves that will advance its global strategy.
The company on Wednesday said it is creating Limited Brands Canada, a Montreal-based company that will support all Limited Brands retail stores and strategic expansion in Canada, including La Senza, Bath & Body Works, Victoria’s Secret Pink and Victoria’s Secret, which is launching in Canada later this year.
Joanne Nemeroff, president of La Senza, was named president of Limited Brands Canada.
Limited Brands said it will consolidate the creative and merchant leadership of its international businesses at its corporate headquarters in Columbus, Ohio. La Senza’s creative and merchandising functions will relocate to Columbus, allowing La Senza to support product development and innovation, store experience and brand positioning. Meanwhile, La Senza’s operational functions will remain in Canada, reporting to Limited Brands Canada.
Leslie Wexner, chairman and chief executive officer of Limited Brands, said the changes lay the groundwork for accelerating La Senza’s growth.
Also on Wednesday, Limited Brands unveiled a franchise partnership with M.H. Alshaya, Co. to operate stores in the Middle East. Plans are to launch BBW stores later this year in the region.
M.H. Alshaya will likely introduce Limited to other international markets. In addition to the Middle East, M.H. Alshaya has a footprint in North Africa, Turkey, Cyprus, Russia, Poland, Slovakia and the Czech Republic. Todd Slater, analyst at Lazard Capital Markets, said Limited Brands appears to be focusing on developing economies such as China, Singapore, Brazil, Southeast Asia and Singapore. “They’ve put more than a toe in the water, but I expect the ankle, leg and the rest of the body” will go in too, he said. “International will have the potential to contribute more to earnings than the U.S. business within 10 years if they partner with the right people.”
“Our main priority is North America,” said Martin Waters, president of International for Limited Brands. “Getting our business to return 15 percent on sales domestically is an overwhelming priority. We will develop a global business over time.”
In addition to international stores, Limited Brands has a business model called TNT for travel and tourism, which consists of Victoria’s Secret beauty stores in airports and travel destinations. Waters said there are seven TNT VS shops operating in airports in markets like Brazil, Mexico, Argentina, Singapore, the U.S. and Barbados. The São Paolo unit reportedly does sales of $10,000 a square foot. “In São Paolo, that concept flies,” Waters said. “We’ll open 10 more locations in 2010.”