THE LIMITED REPOSITIONS TO FOCUS ON BETTER MARKET
Byline: Sharon Edelson
NEW YORK — Could The Limited Stores division finally be on the road to Wellville?
After years of being plagued by poor fashion direction and sliding sales, The Limited Inc.’s third largest division was repositioned this fall to focus on an older, more affluent customer.
According to observers, the move is critical, since Limited’s assortments had become dangerously similar to those of its sister unit, Express, which was cannibalizing its sales.
Limited has been deeply aware of its problems. Last spring, Leslie H. Wexner, chairman and chief executive officer, told analysts, “We remain focused on clarifying and differentiating our women’s apparel brands,” and addressed the need for “clear positioning and better execution” in the Limited Stores division.
“The stores probably look the best they’ve looked in five years,” said Harry A. Ikenson, senior director and retail analyst for Mabon Securities. “They are more cohesive, they make a statement and they’re not confusing when you walk in. The merchandise is less fashion-forward and less trendy. It’s more in tune with a customer in her late 20s and mid-30s.”
To trumpet the recent changes, Limited has been testing a new television campaign, a mea culpa for its sin of digressing into trendier waters.
“Les Wexner swore two or three years ago that he wouldn’t advertise,” said Ikenson. “He felt that if you get the merchandise right, you don’t have to advertise. What’s very positive is that he’s changed his mind.”
Another indication of the company’s commitment to upgrading the design of its women’s apparel divisions is its appointment of Ellin Saltzman, former fashion director of Bergdorf Goodman, as fashion director.
“I think Ellin will have a role in the entire women’s apparel business,” said Jennifer Black Groves, a retail analyst from Black & Co., a brokerage firm in Portland, Ore.
The troubled Limited Stores division, which has been struggling for about four years, has been a drag on the $7 billion corporation.
Operating profits at the 725-store division were at 4 or 5 percent of sales last year, about 50 percent under desired levels.
In 1993, sales were $1.15 billion, a 17 percent decline from the previous year. Sales for 1994 are expected to drop 19 percent to about $1 billion, according to analysts.
“I saw progress in the stores this fall, which is something I haven’t seen in a long time,” said Janet Joseph Kloppenburg, a retail analyst with Robertson Stephens & Co. “There is less promotional pricing and more everyday pricing. The company is clearly trying to define a target market and is working toward providing a consistent fashion look and identity for the Limited store.”
Customers who walk into Limited stores today won’t see the abundance of leggings and sweatshirts that characterized assortments two or three years ago.
“There is a distinct differentiation now between Limited and Express,” said Thomas Filandro, senior vice president of research for retail analysis at Gerard, Klauer, Mattison. “The clothes are more dressy and more classic. There are more separates, but they still have their typical staples, like sweaters.”
Groves said Limited’s new fashion direction is notable for its lack of trendiness.
“The clothes have a more classic, yet fashionable point of view,” she said. “It’s more sophisticated.”
Groves, who saw early samples of Limited’s spring merchandise, which was tested in select stores in October, said, “It was the most fantastic stuff I’ve ever seen. They had chino shorts, long silk skirts, lots of washable silks and absolutely fantastic linens. The quality, from what I saw, has gone up five times.”
According to Filandro, price points this year are slightly higher in some categories.
“There’s more fashion,” he said, adding, “More fashion lends itself to higher prices.”
Limited is bringing its message to consumers through a TV campaign that began running in 12 major markets after Thanksgiving.
In the commercial, a woman standing in front of a Limited store talks about the changes at the chain. “I used to shop at the Limited for everything…up until 1990-1991,” she says. “I was disappointed for a while. This past fall, I walked into The Limited,” she continues. “This is the Limited I remember. I remember it being this good.”
“The commercial seems to be The Limited’s way of saying, ‘Yes, we screwed up in the way of merchandise offerings. We lost you, and now we want you back,”‘ Filandro said.