Retail is a fickle place for investors, where fashions go in and out of favor in quick succession. But for those who are comfortable with the ups and downs of the industry, owning what used to be The Limited stock -- the company recently changed its corporate name from Limited Brands to L Brands (BBWI -2.33%) -- has been a long-term winning strategy, with the stock having posted strong returns both since the financial crisis in 2009, and over the past two decades. Let's take a closer look at what's happened with L Brands, in general, and with The Limited, in particular, recently.

What's behind shares of L Brands?
The key thing to realize is that L Brands no longer owns The Limited. In 2010, L Brands sold The Limited to the private equity company Sun Capital Partners, with Sun taking control of the then-struggling 200-plus-store chain. Sun still owns The Limited, with the chain having grown to 257 locations in the U.S. as of April.

What's amazing in hindsight is how long it took for L Brands to jettison the word "Limited" from its name. Now, the company's main assets are its Victoria's Secret and Bath & Body Works stores, with other companies like the White Barn Candle brand and Canada's La Senza playing a secondary role, and bringing in just 10% to 15% of L Brands' total revenue.

How has L Brands fared?
Lately, L Brands has done a good job of keeping sales moving upward. In May, the company recorded 3% gains in same-store sales, overcoming the headwinds that some other retailers faced in what was a relatively cold spring. With a stranglehold in the intimate apparel market, Victoria's Secret gives L Brands almost unlimited potential, both from store sales as well as catalog offerings.

But rivals have seen the value of the lingerie business and are taking aim at Victoria's Secret's success. American Eagle Outfitters (AEO -1.94%) has had substantial success with its Aerie lingerie brand, which has helped keep American Eagle's overall results relatively strong. Moreover, Aerie has done what L Brands hasn't been able to do: post strong success in its Internet-based sales.

Another up-and-coming competitor is Juicy Couture, a brand of Fifth and Pacific (KATE), which plans to launch a new line of intimate apparel early next year. For Fifth and Pacific, getting Juicy Couture to perform better would mark the final step in its overall turnaround, with the company's other two major brands having already seen gains in comps recently.

What's ahead for L Brands?
Perhaps the biggest challenge for the company will be to choose a permanent name. Having taken so long to jettison the out-of-date impression of still being The Limited stock, L Brands is still a complete misnomer, given that neither of its major brands has an L anywhere in their names. As silly as it sounds, if management can't move more quickly on something as simple as a corporate name, how well can it fare with more crucial business decisions?

One thing is certain: Shares of L Brands won't go back to being called The Limited stock anytime soon, barring an unlikely reacquisition of the old Limited stores. Given the potential within Victoria's Secret, that's not a bad thing, as the upside for shareholders is almost unlimited if the company can improve its execution, and make the most of its strong brand reputation.

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