LIMITED TO SELL LANE BRYANT

Byline: David Moin

NEW YORK — The Limited Inc. posted dismal fourth-quarter results late Wednesday and said it plans to sell the Lane Bryant large-size division, furthering the corporation’s restructuring strategy.
In addition, the troubled Structure men’s wear chain has been put under the management of the corporation’s star merchant, Michael Weiss, who is president and chief executive of the Express division. Last year, Weiss orchestrated a strong turnaround of Express.
Possible takers for Lane Bryant would include Charming Shoppes and United Retail, which both have growing large-size retail operations, though Limited said it would also consider selling Lane Bryant to a financial investor. Lazard Freres has been retained to represent Limited in the transaction.
“Except for the performance at Express, the fourth quarter of 2000 was a major disappointment,” Leslie Wexner, chairman and chief executive of Limited, said in a statement. “Given the U.S. economic situation, we are planning for modest profit growth in 2001, and we are expecting the first three quarters of the year to be particularly challenging.”
Earnings per share for the fourth quarter were $0.55, down 17 percent from $0.66 per share last year, on an adjusted basis, excluding special items. Net income was $243.1 million, a decrease of 18 percent compared to $294.9 million last year. Operating income was $487.4 million, a decrease of 16 percent from $582.5 million last year.
For the latest quarter, sales were $3.52 billion compared to $3.3 billion in the year ago period. Comparable-store sales increased 2 percent.
Lane Bryant, with 653 stores and $930.4 million in sales last year, has had an up-and-down performance under Limited’s ownership, but has recently upgraded its fashion and image. Said Wexner: “It is well positioned and now is an ideal time to pursue future growth opportunities with a strategic or financial buyer.”
Ken Gilman, Limited vice chairman and chief administrative officer, will join Lane Bryant as ceo, in a move that could help make Lane Bryant more salable, though it removes him from his crucial role at the corporation. However, V. Ann Hailey, executive vice president and chief financial officer, who was recruited by Gilman, will join The Limited’s board, suggesting a broader role for her.
The company also promoted Len Schlesinger to executive vice president and chief operating officer. He was executive vice president of organization, leadership and human resources.
Weiss is well acquainted with Structure, which was founded in 1987 as a division of Express under his original guidance. It became a separate division in 1990.
The news announced late Wednesday reflects a continuation of Limited’s restructuring strategy over the past several years, including the sale of the Brylane catalog operation, the sale of majority interests in Alliance Data Systems and Galyan’s Trading Company, the repurchase of more than 300 million shares of company stock, closing more than 1,000 weak stores and spinning off Too Inc. and Abercrombie & Fitch.
The Limited also announced results for the full year ended Feb. 3, 2001. On an adjusted basis, reflecting the spinoff of Too Inc. as if it had occurred at the beginning of fiscal 1999 and excluding special items, net income was $432.9 million, or 97 cents a share, a decrease of 3 percent compared to $445.5 million, or 97 cents. Operating income was $876 million, a decrease of 3 percent compared to $900.3 million last year.
Total sales topped $10 billion, finishing at $10.10 billion, 3.5 percent higher than the $9.54 billion registered for the 52-week year ended Jan. 29, 2000. Comp-store sales increased 5 percent for the year.
The news came after the markets closed on Wednesday. Limited’s stock closed down 28 cents to $17.65 in New York Stock Exchange trading.
The Limited also operates Lerner New York and Henri Bendel and owns approximately 84 percent of Intimate Brands Inc.