Victoria’s Secret Direct Up, but Below Expectations
Limited Brands, the parent of Victoria’s Secret, reported an 11% increase in first-quarter sales, to $2.31 billion for the 13 weeks ended May 5. Sales for Victoria’s Secret Direct, the catalog/Web division of Limited Brands, increased 9%, which was below company expectations. Same-store sales increased 4%. Net income sunk 47%, to $52.9 million down from $99.4 million.
On May 15, the Columbus, OH-based company announced a definitive agreement to sell a 67% interest in its Express retail brand to affiliates of private equity firm Golden Gate Capital for $548 million. Company officials said they expect to realize after-tax cash proceeds of $425 million for the transaction, which is expected to close by July 6. Express’s 2006 net sales were $1.7 billion; it currently has 631 store locations.
Limited Brands had previously announced it would sell off its Express and Limited Stores apparel chains to focus on its growing intimate apparel and beauty brands; Victoria’s Secret, La Senza, Pink (a Victoria’s Secret spin-off), Bath & Body Works, White Barn Candle Co., Diva London, and C.C. Bigelow. It also intends to retain high-end New York department store Henri Bendel.
First Quarter’s Not the Charm for Charming Shoppes
First-quarter net income for women’s apparel merchant Charming Shoppes fell 18%, to $26.3 million from $32.1 million. Despite the bottom-line decline, company officials said net income for the quarter ended May 5 met their expectations. They said the reason for the decline was lower merchandise margins related to promotional pricing after “unseasonable and unfavorable weather trends” during the quarter. Another contributing factor was lower sales from its apparel catalogs.
Net sales increased 7%, to $784.7 million. Retail sales rose 9%, to $685.5 million. Same-store sales were flat, compared with a 1% increase last year.
Net sales in the company’s direct-to-consumer segment decreased 8%, to $98.4 million from $107.4 million. The Bensalem, PA-based company blamed the decrease primarily on a decline in response rates from its core customer mailing list. The company’s direct titles include Brownstone Studio, Coward Shoe, Lew Magram, and Old Pueblo Traders.
Charming Shoppes will be launching a Lane Bryant catalog in November, when the brand name for the catalog reverts back to the company, which also owns the Lane Bryant retail chain, from licensee Redcats USA.